Many people cherish their family home and it’s common to want to pass on your family home and all the memories to your children. Several ways to do this include transferring upon death, transferring to a trust, and selling to your children.
Transfer Upon Death
You can transfer the home to your children when you die. This can be the easiest way to pass the home on to your children, but every case is different. This is a good option because it significantly lowers the amount of fees and taxes included in the transfer. As long as your estate is below $11.58 million, your estate will not have to pay estate taxes and your children will avoid a lot of capital gains taxes if they end up selling. Choosing this option is popular and it’s important to talk with a professional before making any major decisions.
Transfer to a Trust
Another way to transfer your property is to put it in a trust. A living trust has more flexible terms than an irrevocable trust. An irrevocable trust will put your children as beneficiaries and therefore won’t be part of your estate when you die, so your estate won’t pay any taxes on the transfer. Once you put the house in the trust, it cannot be taken out again. If it’s sold, any proceeds must stay within the trust. This can be a good option for many and each circumstance is different.
Even if you plan to live in the home after it’s sold, you can sell your home to your children. There are a few different ways to do this. You can sell it at a fair market value, you can loan money to your children, or sell below market value. Each of these options can be tricky though and there will be several things to be considered before choosing this option. If this is the way you want to pass on your family home, the best way to do this is to consult with an attorney before choosing this option.
It can become complicated if you want to give your family home to your children, so it’s always a good idea to talk with an advisor, or several, and make sure that your decisions are in the best interests of all people included. However, transferring upon death, transferring to a trust, or selling to your children are all viable options.
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