Planning for the time when you’ll no longer be around is a difficult topic for many of us to discuss. After all, who wants to be reminded of their own mortality? But, regardless of the discomfort, it’s a topic that needs to be addressed. Avoiding it can only bring confusion and hostility among your heirs and the possibility that your hard-earned assets won’t be passed on as you would have intended.
When the administration of an estate plan involves the inheritance of a house, as many do, the potential for problems grows even greater. While most situations go smoothly, just as many don’t, and the decisive factor between the two outcomes almost always boils down to how much forethought goes into the succession plan — who gets what when you’re no longer here?
Because of the emotions almost always attached to a home, whether it’s a primary residence or a vacation cabin — as well as the potential financial implications — deciding who will inherit your home and how it will be inherited is tricky territory to navigate. No two families share the same relationships among their members. When an asset as substantial as a property is involved, emotions can overtake logic, leading to tensions that can last for a long time. All the right “what ifs?” must be asked — regardless of how uncomfortable these questions might make everyone feel.
In our newest episode of Absolute Trust Talk, Kirsten Howe and associate attorney Madison Gunn will closely examine the many factors that should be considered when you’re passing real estate on to your heirs.
0:00 Introduction 2:13 Property taxes are a major issue when a home is inherited. Here's how legislative changes can alter the taxation landscape. 4:03 There are plenty of considerations to be made for an estate plan when a family home — or any real estate — is involved. Start listening now for what you need to know. 4:45 Press play now to learn about two scenarios that are the easiest to carry out when an estate plan calls for the dispensation of real estate. 5:27 When more than one child is involved, things can get a bit more complicated. Here's why. 6:42 Real-life situations don't always go as planned, leading to the depletion of financial resources. Kirsten and Madison share a prime example. 7:18 When a parent wants one particular child to inherit the home and divide the estate equally, there may not be enough assets to carry out this plan. Here's one strategy to help resolve that type of scenario. 8:57 Heirs embark on decidedly different life paths and can have varying levels of financial success. Start listening now to learn how it can affect their ability to inherit a home. 9:17 This one question is a pivotal part of building the contingencies that make for a successful estate plan. 10:49 Even if the family home is to be sold, the process isn't always that simple. Here's what you need to know. 11:28 This action can alleviate many confusion and resentment among beneficiaries. 13:11 If one child wants the family home, but the others don't, we've got insights to help handle the situation appropriately. 15:10 What if multiple children inherit the home, but only one wants to live there? We have a few ideas for you to consider. 16:15 Press play now to hear about a common scenario that should be avoided whenever possible. 17:20 When multiple children inherit a home and plan to rent it out, properly organizing their business relationship is vital. Here's the best way to accomplish that. 19:23 What happens if you want the house to remain in trust? Are there pitfalls to this situation? 21:35 Placing a home in a trust brings its own set of challenges. Here are some of the questions that need to be asked. 24:52 The family home, or even a vacation cabin, may not hold equal appeal to all your heirs. This is why having a candid conversation will lead to a clearer understanding of the future. 28:45 Q&A: Can the trustee sell the house even if other siblings don't want to? 29:45 Q&A: Is the trustee required to rent the house after the parents die? 30:42 Q&A When the trust leaves the mortgage to one child, does the mortgage also go to that child?
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