Keeping a family home in the family is often a concern for estate planning clients. Sometimes this property has been in the family name for multiple generations and has historical and emotional significance to children and grandchildren. There are a number of options available to make sure that your property passes to your descendants, or maybe only one child in particular.

Some option would have the ownership of the property transfer while you are alive, such as a Gift, Life Estate, or Sale. Others can be documented now, but the property will not transfer until your death, such as making a Will or Transfer on Death Deed. What will work best for you and your family is also determined by whether you want to continue living on the property during your lifetime or have your children move onto the property immediately.

If your children want to start living on the property immediately the easiest method is to sell or gift the property to them. There is even a middle ground for families with limited funding but still wanting to transfer property called a Gift of Equity. A gift of equity occurs when a family member sells property to another family member for below the sale price. The difference between the price paid and the listed price is considered an amount of equity to be used toward the down payment or to help pay off debt to qualify.

If your plan is to live on the property for your lifetime you have a few more options. The first is a Transfer on Death Deed is a document recorded during a property owner’s lifetime that directs that the property will be transferred to a beneficiary when the owner passes away. This option does not take effect until your death but can be recorded at any time. You also have the option of recording a deed with a Life Estate, this would transfer the ownership of the property to a new owner right away, but allows the original owner to stay at the property as long as they want or until they pass away.

Of course, you always have the option of gifting all or part of your property while you are alive, as well.  If you were to gift the entire property to a loved one during your lifetime they would have the sole right to that property. However you can also gift someone with a partial interest in a property as a joint tenant, or if your intent is that they eventually inherit as a joint tenant with right of survivorship. In the latter case this would result in shared ownership while you were alive, but at your death your interest would automatically go to all other tenants with right of survivorship, without probate or further property transfers.

All of these are ways to help keep your property in your family and avoid going through probate, however your property can also be transferred through your will. In a will, the person can designate a beneficiary to receive any property that the decedent leaves to that beneficiary. The transfer of property actually takes places at the time of the owner’s death. You can also specify in your Will if the property is to go to some in particular, a specific gift, or just to be divided between your descendants, a residual gift. When including a home in your will as a residual gift you should consider the finances of who you are giving the gift to as inheriting through a will does not eliminate your mortgage and often times whoever inherits the house will need to qualify for a new mortgage, or in the case of multiple heirs come to an agreement about buying out the interest the other heirs have in the house.

If you have questions or concerns about transferring property or estate planning, call Limitless Law PLLC at (360) 685-0145 or use the “Ask an Attorney” link on our website to contact us today!

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