Like many Americans, your home is probably your largest asset. However, if you have children who have grown and moved away, you’re left with an empty nest, quiet and big. You may be torn between keeping the house and passing it to your children someday, or selling it. On one hand, it may be the biggest asset you could pass onto your children. On the other hand, you have your own immediate needs to consider, and maybe you’re not quite sure your kids could handle the house when you are gone. Before deciding whether to sell or keep your home, consider the following:
Your estate won’t pay federal estate taxes if the property is worth less than $11.2 million, but there may be state taxes to deal with. Likewise, if your heirs keep the house, they will have to pay for upkeep, including property taxes. Property taxes increase as property values increase. While your children may want to have your house, they may not be ready to pay the taxes.
Your children will also have to pay taxes if they sell the house. This may be no big deal if the house is very valuable, gets a good price, and is sold in a seller’s market. However, if your children feel compelled to sell it, they may not be able to wait for an ideal time. You, on the other hand, may have time to wait for better conditions and can better absorb the taxes.
Regardless of whether your children keep your house or not, they may have to deal with cleaning, de-cluttering, repairs, and renovations. Unless you’ve been diligent with downsizing, you may be leaving a lot of work for your children, who may also have jobs and families to care for. You, however, may be in a better position to make your house move-in ready for your children or whoever buys the house.
The Here and Now
It’s important to plan for your future, but estate planning is about the present, too. You’re still alive, and you not only have needs, but desires and wishes. You probably don’t want to spend all your golden years planning for the time when you won’t be around.
If you don’t want to keep and care for a big house, you could still maximize the inheritance you are leaving to your family while enjoying your life. You could sell your house and buy a smaller condo, while putting the remaining money in a trust to take care of your expenses while you relax, take up a hobby, explore the world, or spend your time focusing on volunteer and charity work. The trust can then be left to your family when you are gone someday.
A will and trust attorney can help you create an estate plan that fits your present needs and your desire to leave something for your children. We can help you understand both the laws that govern your property and the relationships you want to preserve. If you’d like to speak to our will and trust attorneys about creating an estate plan that is tailored to your needs, simply call us to set up a consultation.