The Pitfalls Of Letting Your Children Inherit A House Jointly

Sometimes you miss the days when your children were little. You feel the pangs of nostalgia when you see a parent wrangling a toddler into the child seat in a shopping cart while the toddler’s older sibling runs through the cereal aisle grabbing every colorful box that promises a cavity in every bite. You miss the days when you could solve all your child’s problems just by wrapping him in a baby blanket and cuddling him. Most of the time, though, you are glad that your children are grown up. You don’t miss their constant fighting. It is better now, since they are happy to see each other at your house during family gatherings. The desire to solve your children’s problems never goes away, though, and now that they are adults, most of their problems relate to money. It is a source of peace of mind for you that you can leave your children an inheritance. Homeownership is the cornerstone of generational wealth, but by letting your children inherit your house jointly, you could leave the door open to more problems. For help crafting an estate plan that provides the maximum benefit for your heirs, contact a Tampa estate planning lawyer.

A Recipe for Sibling Rivalry

You might think that letting your children inherit your house jointly is the fairest thing to do. They might not be equally emotionally invested in it, though. You certainly don’t expect them to live in it together, especially not if they are married and have children of their own. The inherited house can also be burdensome if some or all of your children live far away from it. They might decide to rent the house out or sell it, but either of those options forces them into engaging in a major business transaction together. Just because they have learned to get along together as siblings, it does not mean that they are ready to introduce financial decisions into the equation.

The simplest solution is for one sibling to buy out the others’ shares of ownership, but the sibling that wants to keep the house might not be able to afford to do that. The worst-case scenario is that one sibling wants to sell the house but the other refuses to sell or to buy out the first sibling’s share. They might need to resolve the matter in court, and the judge might order the sale of the house or a refinance that enables one sibling to buy out the other’s share.

What to Do Instead

Before you state in your will that your children will inherit your house jointly, make sure that this is what they want. If it isn’t, then let one heir inherit the house while the others inherit other assets, or order the estate to sell the house during probate and divide the proceeds among the heirs.

Contact David Toback About Transferring Generational Wealth

A Central Florida estate planning lawyer can help you if your house is the most valuable asset in your estate.  Contact David Toback in Tampa, Florida to set up a consultation.

Source:

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