One of your biggest assets is probably your home, especially in California. When planning your estate, you may wonder how you can leave your home to your relatives, or to one relative in particular. The following Q&A may help you.
What are my options?
The five most common ways to leave a home to a friend or relative include:
- Putting the person in your will
- Creating a living trust
- Creating a revocable or irrevocable trust
- Creating a living trust
- Modifying the deed to transfer on death – or TOD –, joint tenants with right of survivorship, or tenants by the entireties, although not all states have this option
Although you can leave your property to whomever you want, it’s best to advise your relatives of your intent when you plan your estate.
Why wouldn’t my heirs want my home?
Your mortgage may have a “due on sale” clause, which means your heir might have to qualify for the mortgage. Depending on the equity and balance, they may not qualify, or their personal circumstances may preclude it. They may also owe money in the form of taxes, legal fees, and other costs that would force the liquidation of the home.
What about insurance policies?
Sometimes, inheritances can cause strife among relatives. Consider using an insurance policy to balance out substantially uneven legacies.
Specify what you want to be done with the house
If you want the home to be sold, want a specific person to live in the home, want the home to be rented or not – these are all decisions you need to specify in your bequests.
Get professional advice
Inheritance laws are complex and vary by state. Although planning your estate may seem macabre, it’s the best thing you can do for your relatives and beneficiaries. They’ll already be grieving, so eliminating important but unpleasant decisions like what you want to be done with your assets is one of the best things you can do for your loved ones.