One of the most valuable assets in many estates is the family home. As part of your estate planning, it is important to thoughtfully determine who will inherit it or what will happen to it. Doing this can prevent family feuds over your home.
Equal shares might not work
Sometimes parents will leave a home in equal shares to all children. While this can be a sensible approach, it doesn't work for everyone. One child might want to sell, while another might want to keep the home. The child that wants to keep the home could buy out the other child, but he or she might not have the funds to do so. At the same time, a forced sale could cause irreparable harm to the siblings' relationship.
Have a conversation with your kids
To avoid this, parents should have a conversation with their adult children to discover whether any child will want to keep the home. It could be that a child is emotionally attached to the home or believes that he or she will not be able to afford to move out should the home be sold. Whatever the reason, it is wise to find this out while working on your estate plan.
With this knowledge, you can decide to leave the home to one child and compensate the other child with something of equal value. This could be other real estate, life insurance proceeds, retirement funds, or multiple assets. If you don't have assets equal to your home, you could work out some other arrangement or simply state in your estate plan that you'd like your home sold. In the least, this could prevent bad blood between your children as the decision to sell is made by you and is put out of any of the children's hands.
When working on your estate plan, be mindful of the possible family conflict that could accompany your home and try to prevent it. Leaving it up to your children to decide after your death might not be the best choice.
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