If you're like many Americans, your home is the single most valuable asset you own, and perhaps the single most important item to consider when drafting your estate plan. It's important to know that your children will inherit the family home after you have passed away — and to that end, there are several legal instruments that can ensure this important asset and the hard work that it represents will be passed down to the next generation.
A properly drafted will is one of the best ways to ensure that your home goes to your children. Through this legal document, you can outline how your property will be distributed among your children and loved ones upon your death.
One thing to keep in mind, though, is that a will must go through probate court before your assets can be distributed to your beneficiaries. This process can be time-intensive and can incur additional legal fees, particularly if someone contests the will. Furthermore, disputes may arise if you split ownership of the house between multiple children since they will have to make decisions regarding the house jointly.
A living trust is another way to ensure that your house passes to your children after you're gone and comes with particular advantages over a will. It allows you to transfer assets to a trust of which you are both the trustee and the lifetime beneficiary, which means that you will continue to effectively own your property while you are still alive. After your death, the trust and its assets will pass to a contingent beneficiary or beneficiaries — i.e., your children. However, particular care must be taken in drafting a living trust in order for it to be implemented properly.
The principal benefit of creating a living trust is that it allows your family to avoid probate court where emotional, intrafamilial disputes over property division may arise. Instead, the trust passes immediately to the named beneficiaries without any additional legal fees or time spent in court.
Another option you could explore is making your child a joint owner of your home. Upon your death, your home would simply pass to your child through right of survivorship, because they are already listed as a joint owner of the house. We always advise our clients to consider this option with caution, as adding a child as a joint owner could cause unintended problems, such as exposing the parent to liabilities the child may face as a result of an accident, lawsuit, or divorce.
Transfer on Death Deeds
As with a living trust, a transfer on death deed allows you to maintain ownership of the home during your lifetime, after which it will pass to a named beneficiary without going through probate. However, transfer on death deeds are not available in all states and must be entirely redrafted if you change your mind about their terms.
If you would like to learn more about estate planning and bequeathing your home to your children, contact us today to set up a consultation. You can schedule an appointment with our Bryan estate planning law firm by contacting (979) 703-7014.