Leaving your house to your kids can be a complex challenge to solve as more baby boomers are finding out as they head into retirement. They’re faced with either deeding the property to their adult children now, so there’s absolutely no fighting later, or selling it and downsizing to leave lots of cash for your children to divide.
An alternative for older adults who prefer to stay in their homes would be to present their home into an heir instead of downsizing. Normally, a home is left through a will, but there are also several trust choices that enable you to keep costs down and postpone the actual transfer of the asset until after you are gone. Of those estates which were set up in a trust, roughly 53 percent were able to stop family discussions according to an Estate Planning Awareness Survey done in 2016 by WealthCounsel, an estate lawyer education and software firm.
In case you have heirs that all get together, a simple will works best. For those who have several heirs which have different financial ranges, then you will have a bigger possibility for disagreements to split out. Even if all you have to leave is the house, there may be family differences about what to do with it. Setting up a trust is the best alternative that will prevent conflicts and the high cost that is associated with probate.
When you create a trust, you’ll have lower upfront costs and there’s absolutely not any need to go through probate. Probate can get very costly, especially for out-of-town executors that have to fly in to take care of the paperwork to settle the will. There are also costs for financial planners and an estate and elder law attorney as well as the time and cost of missing work. Plus, between five and fifteen percent of the total value of an estate will go to pay for the legal and probate fees.
When setting up a trust, you’ll need an attorney in addition to a trustee that has great organizational and financial and abilities that is comfortable with the duty. A trust can be revocable or irrevocable with both having their pros and cons. An irrevocable trust requires the grantor to give up the ability to stop the arrangement.