The equity you have built up in your home over the years is potentially your biggest source of personal wealth. It may be the most valuable thing you have to pass on to your loved ones when you die.
Especially if you are now the sole owner of the home where you live, you need to put careful consideration into what happens to the property at the time of your death. There are several different approaches to the home, and your family circumstances and priorities for your estate will influence which solution is best for your circumstances.
With rare exceptions where people own historical homes that they want to donate to the community or to a local historical trust, there are typically three approaches people employ for their homes in their estate plans.
They leave the property to someone they love in their will
The most straightforward way to handle your home when you die is to bequeath it to one person in particular. Children and grandchildren may be grateful for the opportunity to have a home to call their own. The value of the property if they sell it could also be enough time for purchasing another property, funding a college education or starting a business.
They moved the property into a trust
If you thank you will receive Medicaid benefits when you get older or can easily imagine your family members fighting over your property when you die, then adding a trust to your estate plan could be a good decision.
Holding your home in a trust can protect it from creditor claims and Medicaid estate recovery attempts. It can also prevent family members from selling the home and limit them to living there instead.
They order the sale of the property
If no one in your family will likely want to live at your primary residence after you die because they already have their own homes, then having your executor sell the property might be the most practical choice. Your beneficiaries can share whatever the estate receives for the property, making it much easier for you to avoid leaving behind an imbalanced inheritance for multiple loved ones.
Looking over your financial circumstances and family relationships can give you a better idea of what to do with your home in your estate plan.