Passing Down the Ol’ Family Home

A dream shared by many Baby Boomers is being able to pass down the family home or vacation property to their children or other loved ones. There are several different methods for achieving this goal, some easy, some more complicated. The Consumer Financial Protection Bureau (CFPB) introduced in last week’s blog, is a U.S. government agency dedicated to making sure everyone is treated fairly by banks, lenders and other financial institutions. In the second in a series of publications called Housing Decision Guides, CFPB discusses “Leaving your home to children or heirs.” I’m thrilled to be promoting this series of booklets and sharing our Senior Housing Hunt branding on the materials.

Seek Advice

There are many factors to examine when determining how and when to pass your home on to loved ones. Legal and tax implications, the timing of such a gift and how it might affect both your ability to thrive and your heirs’ ability to benefit from the inheritance. It’s a good idea to talk to a professional with expertise in gifting property.

The second CFPB booklet lists several helpful categories of assistance for Baby Boomers thinking about leaving their home to loved ones, from sources for legal services, housing counseling, credit counseling, and accounting help. Additionally, the National Council on Aging also is a great source, and has a “Benefits Checkup Tool” that connects older adults with programs they may qualify for.

How to Pass Along a Home

The Housing Decision Guides second booklet goes into detail describing the possible ways you can leave your home to loved ones. There are five options available:

  1. Leave your home in your will.
  2. Give your home as a gift.
  3. Sell your home to your loved ones (or adding them to the title of your home while you’re alive).
  4. Place your home in a trust.
  5. Create a “transfer on death” deed for your home.

Some of these options incur costs, both for you and for your heirs. In the case of leaving a home in a will, your state may require your heirs to go through probate before getting the home. Probate is a formal legal process that recognizes your will and appoints an executor or personal representative
to distribute your property. Having a will makes the probate process simpler and faster.

Other options may have different kinds of ramifications. Gifting or selling a home before you die may mean that you have to move immediately. Adding heirs to a title could have tax implications. And “transfer on death” deeds are not available in all states.

Ask Your Loved Ones

Finally, it’s a good idea to talk to your heirs about your idea. In living longer these days, the parents’ passing away may happen long after children or other loved ones are well-established with homes of their own and a community they love. Find out if they would keep or sell the home if you leave it to them. If they’d sell it, the choice you make could have tax implications for them.

As I’ve mentioned many times, planning is the key. As with all major life decisions, planning ahead simplifies the process — and could minimize any family disagreements. By consulting experts, talking with loved ones, and planning ahead, you will set yourself up to thrive in your Third Chapter!

See last week’s blog on the first publication in the series, “Making Decisions When Your Health Changes.”

Third Chapter Living celebrates, challenges, informs and promotes conversations about housing issues affecting the Baby Boomer Generation. Check out our website to learn more about our work on aging-in-place options. The author, Reese Fayde, is a dedicated problem solver and skills development coach. She’s passionate about working with change-makers — individuals committed to transforming the status quo, whether it’s in their industry, community, or organization.

3 Comments

  1. Miriam on March 6, 2024 at 9:26 am

    An excellent article. Very timely for us.
    Thank you.

  2. Susan Stockard on March 6, 2024 at 11:14 am

    It’s great to have all this information in one place. Thank you!

  3. Reese Fayde on March 9, 2024 at 1:30 pm

    I just received an email message from a colleague with such useful info, I felt I should pass along. Susan wrote:

    I read your post about “Passing Down the Ol’ Family Home”.
    Indeed, this is helpful. While you cannot cover all in a post, what is not mentioned in the article is a QPRT which vests the home in the name of the children (if you plan to give them the family home) after a set number of years. My parents used this method. My sister and I received the home without a taxable event. Pretty amazing!!

    Take care and keep sending your blog posts!!

    To all of you: Keep those comments coming! We all have something to share. Thanks, Reese

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