If you own significant equity in your home, or even own it outright, you may be thinking about passing your home down to one or more of your heirs.
Discussing inheriting your home can be a difficult conversation to have, but at some point, it is a necessary one. Let’s go over some tips to help you make the discussion a successful one.
5 Tips to Help You Make The Inheriting Discussion Successful
- If you have concrete plans, explain them clearly. Maybe you already have made a decision about the house. Perhaps you have settled on exactly who will inherit it. Or maybe you are getting a reverse mortgage, and that will affect your ability to pass down the home altogether. Either way, if you already made up your mind, be clear, specific and transparent with your heirs.
- Ask your children directly what they prefer regarding your home. It is best not to assume one of your heirs will or will not want the house. Ask them directly if they would like it, and what they intend to do with it. If one child wants it and the other does not, but you were thinking the reverse was true, finding out their actual preferences can help prevent a lot of hassle and pain.
- Try to be equitable. There may be situations where you can split the ownership of your house between two or more heirs, who want to share it. But in many cases, you will end up giving the house to one heir and not to another. It may be impossible in those scenarios to “equally” distribute the inheritance. Even if you give other heir something of equal monetary value, the house may have sentimental value that is unique to the building. In addition, the needs of your heirs may differ from one another. If one is a multi-millionaire while the other is barely scraping by on minimum wage, it may not make sense to give each an equal amount. For that reason, you may just need to do your best to be equitable with how you distribute your wealth among your heirs. Try to be as far as possible.
- Figure out the best way to pass down the home. There are multiple options for passing down a home such as gifting it, selling it, or transferring it through a last will and testament, trust or transfer-on-death deed. Look into the pros and cons of each option, and figure out what will work best in your family’s scenario.
- Be ready to face challenging emotions. Discussions about inheritance are never easy. You and your children will be confronting mortality through the conversation. You, your heirs, or both could feel scared or depressed. In some cases, there could also be bitterness, guilt or rivalry, especially when there are multiple heirs. So, try to be patient through the discussion, and realize that in some cases, you might need to take a break and come back to it again soon.
Get Help Planning Your Future
While Blue Square Mortgage is not an estate planning company, we can help you understand how your existing mortgage can impact your heirs, as well as how refinancing or taking out a reverse mortgage could affect what you are able to pass down. We can also connect you with suitable lending products that can help you maximize the wealth you have to enjoy your retirement and share with your heirs.
To schedule a consultation, please give us a call at (206) 352-6453. We work with homebuyers and homeowners in Washington State and Colorado.
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