For many people, their home is their largest asset. Therefore, they want their children to inherit their home. Working with a California estate planning attorney is the best way to ensure your children inherit your home after your death.
Leaving Your Home to Your Adult Children
There are four basic ways you can leave your home to your children in your estate plan:
Last Will and Testament
Most individuals choose this simple route to pass their home and other assets to their children. Your Will allows you to choose who inherits your property. Without a Will or other form of transfer directly to your children, your house would be distributed according to California’s intestate laws.
Joint Tenancy with Right of Survivorship
You can title your home jointly in your and your children’s names. Upon your death, the home passes directly to your children. The property does not pass through probate.
However, joint ownership has some risks. For example, if your children file bankruptcy, go through a divorce, or have judgment debts, your home would be subject to those actions.
Living Trust
A living trust allows you to pass your home to your children outside of your estate. The trust holds title to your home during your lifetime. Upon your death, the property can remain in the trust for the benefit of your children, or it can pass directly to your children without going through probate.
Transfer on Death
Some individuals title their home so that it passes to their children upon their death. They hold an interest in the home during their lifetime, including the right to sell or mortgage the home.
Leaving Your Home to Minor Children
The Uniform Transfers to Minors Act (UTMA) governs how assets are transferred to minor children through a Will. You must choose a custodian to manage the property until your child is between an age you designate in the will between 18 and 25 years. The custodian manages the property until your child reaches the designated age in your Will. At that time, the home would be transferred to your child.
A trust may be a better way to ensure your children inherit your home. Trusts give you much more flexibility in managing your child’s inheritance while your child is a minor than leaving the home to your child through your Will. You could also prevent your child from receiving control over the property within the trust until they are older than 25 years.
Depending on the type of trust you choose, you can also increase asset protection for your home. Holding the home in a trust can also prevent spouses from claiming an interest in the home during a divorce proceeding.
Considerations When Creating an Estate Plan
When choosing how to pass your home to your children, it is important to consider the tax implications for your estate and your child. Therefore, tax planning is an important component of estate planning. With the assistance of an attorney, you can develop an estate plan that eliminates or reduces the amount of tax your children will pay for their inheritance.
Schedule a Consultation with Our California Estate Planning Attorney
Estate planning protects your legacy for your loved ones. Call our office today to schedule a consultation with our California estate planning attorney to discuss your estate plan.