How to Leave a House to Someone in a Will: Step by Step
You’ve put a lot of time and love into your home, and you want to see it go to someone who will love it as much as you after you’re gone. If you have an adult child or other loved ones who also has an appreciation for your home, you can leave it to them in your will. To ensure that the transfer goes smoothly after your death, you need to follow specific steps now.
Decide Who You Will Leave Your Home to in Your Will
The first step is to decide who will get the home after your death. This may sound easy, but a lot of thought can go into this decision. You need to decide what you want to happen to the property after you’re gone.
Do you want a family member to live in the home? Are you okay with the idea that they may rent it out or even sell it? Do they have the finances to manage the property and pay for the upkeep? Perhaps it is a vacation home that you want to bequeath.
Answers to these questions will help you decide if leaving your home to someone is the right step. Otherwise, it may be best to sell the house and let your heirs share in the profits.
If it means a lot to you to have the house passed down to someone in the family who will keep it and care for it, you need to discuss this situation with them. Leaving it as a surprise after your death can place a hardship on the person, which isn’t your intention with this gift.
How Much Do They Get?
When you decide to leave your home to your family, you’ll want to consider how much each person gets, if any. You may wish to leave the house to all your children equally. If this happens, one or more may decide they want to sell while another child may want to keep the home. Leaving a home to your heirs can create conflict and slow down the probate process until issues are resolved.
Some estate owners stipulate that the house is to be sold and the proceeds divided equally to prevent these problems. Others may want to leave the home to just one child if that person lives with them in the house. Be clear in your will about who inherits, considering the different challenges that can arise from having multiple people inherit the same property.
Know the Value of Your Home and Other Real Property
You may wonder why the value of the home matters if it isn’t being sold. If you are leaving your home to one person in your will, you may have others that you also want to have as heirs.
For instance, you may have one adult child who wishes to live in the home after your death. If you have two other children, you may want to leave them an equal inheritance in money or other community property that compares to the value of the home.
The value of the property becomes even more important to the beneficiary after your death. At that time, they will pay capital gains taxes on any profit if they sell the house for more than its current value at the decedent’s death.
Talk to an Estate Planning Attorney
When you have a complex asset like a family home, you want to speak with an estate attorney who can guide you on the steps to willing your home to someone. They will help you set up a trust or create a will that provides detailed instructions about what to do with the property after your passing.
If you make any changes to the home or have a change of heart about who you want to inherit, you need to update any records. Otherwise, your most current will stands in court, regardless of a change in your wishes.
You’ll also want to account for the expenses of keeping up the home for your heir. You may want to designate an account for maintenance and property taxes, especially if this property is your heir’s current home and they don’t have the funds to maintain it.
Other Options for Transferring Real Estate
If you know you want a specific person to inherit your home or other real property, you may want to make the changes before your death. Some states allow for a transfer on death deeds. You own the home, but it automatically transfers to your chosen beneficiary, just like with a vehicle or bank account.
You can use this option even if you and your spouse are joint tenants on the property. After the surviving owner dies, the property would automatically go to the person named as the beneficiary for the transfer on death deed without the need for probate court.
Joint Tenant with Right of Survivorship
Another option is a joint tenant with the right of survivorship. In this situation, the heir has joint ownership of the property and becomes the last surviving owner after your death. If you need to get a loan using the equity in the home or a reverse mortgage, you will need the other person’s approval.
Meet with an Estate Attorney
Before you modify your deed, you need to discuss your goals with an estate planning attorney. They will advise you on what’s in your best interest and create the estate planning documents necessary to have your wishes carried out to transfer property and handle other assets in your estate plan.
The law firm also knows what is allowed in your state, such as the transfer on death deed, to ensure your heirs don’t end up with unnecessary delays in the probate process. The attorney will help you protect your most valuable assets and provide legal advice as part of your attorney-client relationship.
Selling the Home After a Person’s Death
Even if you have stipulated that you want the house to go to an heir, it may still be sold if the money is necessary to pay any outstanding debts. All creditors must be satisfied before the beneficiaries can receive their portion of the estate.
Irrevocable Trust
To avoid having the house sold to pay off debts, you can set it up in an irrevocable trust. These assets cannot be touched by creditors. However, you can’t make any changes once you have created this type of trust. You are no longer in control of the assets because they have been moved from your ownership.
Giving someone your home in a will can be a wonderful gift and a way to preserve your family’s history. However, it’s also a challenging and complicated process best left to those who are experts in estate planning.