Estate Planning? Don’t Forget Your Family Home

If you’ve assumed that you’d just leave your home to your children or other heirs in your will, you may want to take a step back to reconsider. After all, even if your loved ones all get along, simply “leaving” an asset as significant as a house can sow confusion – or even discord.

Here’s what you need to know, and what you can do instead.

Where are your heirs? Location is key

Where your heirs live can have a significant impact on your planning. If you want to “age in place” in your family home and leave it to your children through a will, having someone local to deal with probate can be an important consideration.

After all, losing one’s parents is hard enough – having to travel to deal with legal issues after that can just add stress to an already difficult situation.

If you don’t have someone nearby who can help manage the process, it might be worth considering other means for leaving your home to your children. Alternatively, discuss the possibility of travel with your heirs and consult with an estate attorney to make sure you understand any potential tax implications.

How will you pay? Property and personal risks

We’ve all heard the old saying that “failure to plan is planning to fail,” but in the case of estate planning the risks run deeper.

Without a plan for your home (and other assets), situations like the need for additional resources to finance end-of-life care or other emergencies can get much more stressful for families. Not knowing your wishes, your heirs might feel like their hands are tied, or they might disagree about what the best way forward would be.

cloud-download

​​​How To Manage Your

Family's Wealth

Access Your Guide Below

Help avoid these situations by recognizing that your home is probably the single largest asset that you have. If you want to stay in your home as long as you can, consider the personal risks that you might face – a fall, an illness, a need for specialized assistance later in life – and try to think of how your home will factor into those needs.

Maybe you empower your children to sell the home under certain conditions during your life, or perhaps you provide instructions for alternatives.

Due to the complexity, we believe that this type of planning is best conducted with the help of a qualified financial advisor and your estate attorney.

Don’t forget to communicate – and listen!

Depending on the size and structure of your estate and the way in which you leave it, your heirs could get stuck with unexpected legal costs – including the cost of potential disputes. Probate itself can trigger a small but significant outlay for attorney’s fees and related processes.

Add family discord, and a seemingly simple inheritance can become a source of ongoing financial and personal stress.

That’s why communication is so important to estate planning. Have a discussion about your plans, including what you want for your home and how you’d like it to be divided, used, or shared among your loved ones.

From there, be sure to listen.

What you think of as a generous idea – like leaving your family home to your children or grandchildren – can be a source of stress for heirs who would need to either figure out who gets to move in, deal with the process of turning it into a rental, or go through selling the place later on.

In situations like these, strategies like setting up a trust or even making a plan for leaving cash instead of property might be preferable.

In blended family situations, where you might have children from one or more marriages, there could also be additional feelings about who “gets” to have the property, about inheritance, or about preserving a family legacy. These are important conversations to have, and to the extent that it’s feasible we encourage our clients to try and clear the air.

Are you considering all your options?

There is no single answer to how to leave your home to your heirs, and no financial tool is without costs and benefits.

That’s why these types of plans are, in our opinion, best crafted with the help of a qualified financial advisor and estate attorney. In some situations, a will might be perfectly sufficient, but in others a family or personal trust could be more advantageous.

Keep in mind that there are several types of trusts that can be used to meet specific needs with regards to your home. Solutions like personal residence trusts or qualified terminable interest property trusts (commonly known as “QTIPs”), among others, can be useful in meeting unique estate planning needs.

However, these structures can be complex and are not for everyone, which is why an estate attorney can be an important part of your team.

The one thing we feel comfortable saying that you can do, and what we think you probably should do, is to get started on making these plans. In our experience, delays can have the unhappy result of turning your single biggest asset into your children’s single biggest headache.

Are you juggling multiple generations of planning?

Helping your children may just one part of a larger plan to provide opportunity and resources to your family.

Download our free guide to full family financial planning, From the Bucket List to the Bank, for more tips and ideas on estate planning, forging family bonds, and managing the risks that come with a multi-generational approach to wealth management.

Download our free guide and take the reins of your family legacy today!

cloud-download

​​​How To Manage Your

Family's Wealth

Access Your Guide Below

Let Us Help!

We can discuss this topic and more at a complimentary appointment. As a bay area retirement planning coaches, we can give you a review and make suggestions based on your retirement objectives.

Important Disclosures

& Associates Insurance Services or United Planners Financial Services (United Planners). The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by United Planners.

To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk. Neither diversification nor asset allocation can ensure a profit or prevention of loss in times of declining values. United Planners does not render tax advice.

Securities and advisory services offered through United Planners Financial Services, member FINRA, SIPC. Pasquale Vitucci, CA Insurance Lic. # 0758212, is an Endorsed Agent of Vitucci & Associates Insurance Services CA Insurance Lic. # 0I06319. Vitucci & Associates Insurance Services and United Planners are separate and unrelated companies.
This page contains links to third-party company websites. By selecting a link, you will be leaving our website and launching a new browser window. These links are provided for informational purposes only and should not be viewed as an endorsement, sponsorship, solicitation or other affiliation with respect to any third parties. We are not making any recommendations or providing any advice on securities in particular or investments in general. Neither Vitucci & Associates nor United Planners Financial Services have reviewed the content of, and are not responsible for, the information or the results of the third-party websites.

  • What’s Your Biggest Financial Priority for Retirement?
    Have you identified your most important retirement goal? In a survey by LIMRA, a financial services research firm, 59% of people rated “having enough money to last a lifetime” as either their top or second-most goal for retirement. The second most important goal was “remain financially independent,” which 47% of people rated as either a first or second priority. The 2,000 survey-takers were individuals between the ages of 50 and 75 who had investment assets of $100,000 or more. Do those goals sound familiar? If so, it can be helpful to consider the possible benefits of an annuity.
  • Home Ownership for the Long Haul: How to Grow Old at Home
    Are you looking to stay in your home for the long haul? It’s an idea that can make retirement more comfortable, keep your social life open, and even keep costs down. But like any major life decision, it’s one that requires careful planning. In this article we’ll cover a few different issues you might want to think about.
  • An Open Secret for a Retirement Income
    While the trend is changing as people learn more about Social Security, many retirees continue to draw benefits as soon as possible. If you do so, you could end up leaving a significant amount of money on the table. But that doesn’t mean everyone should postpone as long as possible. Let’s look at the issue a little more closely to see how the numbers on Social Security really pan out, and how those numbers could relate to your particular financial situation.