The family home is many people’s most valuable asset; however, leaving the home to your children in your will is not always the best option. How should you determine what to do with your home when you pass away?
Financial experts suggest that it depends on several factors, such as the relationships between your children and the value of the home.
1. How Much Value Does the Home Have?
The current real estate market strongly favors sellers, but depending on when you purchased your home, it could still be worth less than what you paid for it. Additionally, if the market takes a downturn, your heirs could face paying off a mortgage that is more expensive than what the home is worth, plus taxes and other expenses, while they wait for the home to sell. If you still owe a substantial mortgage, discuss the financial implications with your heirs.
2. Do Your Children Have a Good Relationship?
If you have more than one child and your children can not reach an agreement about what to do with the home, leaving it to them could create conflict. In this case, it may be better to sell the home and split the proceeds than to leave it up to the children to decide who gets the house.
In some cases, it makes sense to will your family home to your children. However, if doing so will create a financial burden or cause conflict, you should consider an alternative means of disposing of the property.