It’s quite common in today’s society for children to inherit real estate, be it the family house or the vacation cottage. Parents have a tendency to think of an even split between siblings as the most fair way to leave property, but have a tendency to overlook the possible consequences. Because you can’t easily split real estate, it’s important to know what to do with your property in the unfortunate event of your passing.
If your children are financially comfortable, they’ll have several options: selling the home and splitting the proceeds, one buying out the others and keeping the house, or all keeping the house together and renting it out. This is the type of decision that, while it seems like it could be left up to the children, can have difficult implications. Consider what would happen if one sibling was struggling financially while the others weren’t- their motivations to sell versus keep would be quite different than if they were all in the same boat. There’s no easy answer to this question, so it’s vitally important to make sure that the real estate provision of your will is laid out in concrete terms.
Assuming your children have decided to amicably keep the home you’ve given to them, financial situations have the ability to change over time and force a sale of the property. Decisions about maintenance and repairs have to be made as well, and siblings can have major disagreements about what’s best done there. Co-ownership among cousins can add a degree of complication to this component of the process as well.
With all of this knowledge, what’s a parent’s best option for ensuring that their children’s lives are made better with the passing down of a property, rather than worse?
- Air the Issues. Parents who want to avoid sowing seeds of discord amongst their children should start by discussing matters with their adult offspring. You’d be surprised at what you’ll find out, and your children will be less likely to be angry at the particular arrangement of a real estate plan if they understand its structure before it’s said and done.
- Talk to an estate planning lawyer about your goals, as they’ll be able to perform legal maneuvers that you’re not capable of making yourself (such as creating a trust that provides money to pay for ongoing costs such as property taxes and maintenance). Having an experienced lawyer for these types of situations is vitally important, especially if there’s any disagreement in the family about what should be done.
Source: NOLO