The family home may be the most valuable asset that parents have, and they usually know which of their children, if not all of their children, that they want to leave their home to when they pass away. In Missouri and throughout the U.S., it takes estate planning to ensure that the family home stays in the family.
The estate planning process provides three options for leaving a home to one or more children, referred to as beneficiaries. The first of these is a will, which is a legal document in which the parents specify whom they want to inherit their assets. All assets included in a will go through probate, which is a court-supervised process, to ensure that they are transferred to the beneficiaries in compliance with the will terms. However, the debts that the parents owe when they die have to be paid first. With multiple beneficiaries, each inherits an undivided interest in the home, so they have to agree on what happens with it, which could cause problems between estranged siblings.
A living trust is another method, which allows parents to transfer the home to the trust and to manage and benefit from the asset. There is no probate process with a living trust, which avoids related expenses, but outstanding debts still need to be paid first. Conflict between multiple beneficiaries can be avoided by appointing a trustee as the decision-maker over the assets.
Including certain words in the deed to the home is a third method, which avoids probate delays and living trust costs. Upon the parents’ deaths, the beneficiaries named in the deed become the owners of the home.
Each of these estate planning options has benefits and detriments, so it is important that parents choose the best option for their goals, finances and other factors. Estate attorneys could help them weigh these factors and determine which method is best.