There comes a point in time that we all need to consider what to do with our belongings after our passing. Estate planning and writing a will isn’t something many people want to think about or even spend time on but, inevitable, death is something we must deal with. It is important to plan for what you’d prefer happen to your belongings and property prior to your passing to avoid stress on family members and loss of assets you’d like to bequeath to loved ones. As most people’s largest asset planning, what will happen to your home is especially important. Property is often gifted to family members; children or grandchildren, brothers or sisters, etc. Before leaving your home to a loved one, there are many factors to consider in determining if it is the right option for all parties involved.
- Location and desire of the family members. If the family member you are considering gifting your property to lives in another state it is important to consider the implications that this will have on their ability to manage the property. You need to ask yourself, “Do they even want the property?”, “How often can they get here to manage the property?”, “What are they going to do with it; sell it, rent it, or live in it?” Of course, the easiest way to answer these questions and determine if it is a good fit for the person is to talk to them about it.
- Legal requirements including income tax implications of transferring your property. When contemplating gifting property, it is a good idea to seek legal advice from a trusted professional. Probate can be a long, stressful and costly process for families during an already difficult time. By working with a legal advisor in advance you can ensure your home, and any associated trusts, are properly set up to allow the most seamless and cost-effective transfer for your loved ones. Often many probate issues can be avoided with the proper planning. This is a good time to work with them to ensure they are financially prepared as well. Your estate planning should also include planning for the tax implications of the transfer.
- The condition your home is currently in. The condition of your home may seem minor in the grand scheme of things but it plays a huge role in the processes that follow a transfer. If the homes condition is below average and requires remodeling to bring it to the top of market value, then it must be acknowledged that whomever you gift the property to is going to bear the costs of home improvements. It can be expensive and messy to remodel and update a home. If the family member lives outside the state, this is going to especially difficult for them. It may be the case that selling the home for cash is a better suited option than costly updates and time consuming home improvement projects. If you determine this is the case, reach out to us for an offer on your home. Click here and fill in the relevant information and we will get back to you shortly.
- Capability of the loved one to handle and manage the property. We understand that gifting a property can seem like the best gift a person can give someone. In some cases, it can be but it’s important to understand and consider all factors first. If the person you are considering gifting your property to is willing and able to take on the responsibility that comes with owning a property it can be a beneficial transfer. Always talk to them first, ask them questions, and make sure they fully understand what comes with owning property, especially if they never have before. If their health is suffering or they have a million other things they are responsible for handling, consider this. The gift of a property should be just that, a gift, not a burden.