Many estate planning clients ask me about how to give their real estate to their children. Oftentimes, they are hoping to leave a gift of the family cabin or recreational land in a way that allows their children and grandchildren to continue to use and enjoy the property for years to come, beyond the client’s lifetime.
I have written before about trusts and limited liability companies (LLCs) for this type of gift, but it also helps to take a step back and look at the bigger picture with the following questions:
- Do all of your children and grandchildren want to continue using the property after you’re gone?
- I encourage you to talk openly with your family about their wishes and concerns to ensure that your estate plan addresses those needs.
- Can your children afford to continue owning and maintaining the property on their own?
- We often find beneficiaries in a position of inheriting land when they had no idea how expensive the land was to maintain.
- If you are willing to share financial information with your children, such as the costs of insurance, taxes, and maintenance, it will allow you to better plan for how those expenses will be covered.
- Do you want the children to own the property outright, or do you want to help them plan for the continued use of the property through a trust or LLC?
- If one of your children passes away, do you want his/her share to go to his/her children, or should that interest pass to your surviving children?
As you can see, there are a number of factors to consider when planning a gift of real estate to your loved ones. Having a conversation with your family to address these questions could be a great first step. As more questions arise, our estate planning attorneys at McCarty Law are here to help you.
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