As you make your estate plan, odds are good that your home is your most valuable asset. For most people, the only thing that would come close is a family business or a life insurance policy — or, of course, another piece of real estate, such as a second home or a vacation cottage.
Due to the value and perhaps some sentiment or family history, you likely want to give that asset to your children. Many parents simply leave it to the children collectively — splitting ownership between two siblings, for instance — and allow them to do what they want with it.
But do they even want it? Most family homes are just sold after they’re inherited. That’s a process that can be complex and stressful for your heirs. While there are certainly exceptions, a lot of heirs are in their 40s or 50s when their parents die, and they have their own homes. Your children may have lived in these homes with their families for even longer than they lived in the home they grew up in. Leaving it to them just gives them a complex asset that they don’t need.
What should you do instead?
There are a lot of alternatives. You could sell the home before you pass away and leave your heirs the money from the sale. You could put that money in a trust so that they need to use it in accordance with your wishes. You could set the money aside to pay for your grandchildren’s education.
It’s important to know all of your potential options for your home as you’re doing your estate planning so that you can decide what’s best for you and your family.
