Deciding who will inherit the family home can be a difficult task. Besides the inherent value of the property that is involved, family members form emotional attachments to the places that they grew up and spent so much time in. The most common scenario used to be older parents living in houses by themselves and leaving the house to their children, but today’s modern family living situations are much more diverse. You might have adult children and grandchildren sharing the house with grandparents, stepchildren, or divorcing couples trying to work things out. There can be added complications when one inheritor wants to stay in the house and another one hopes to sell it. How are these details handled?
How Can I Decide Who Gets the House After I Pass?
If you own a house and pass away without a will, your spouse, registered domestic partners or blood relatives could inherit it under intestate succession laws – unmarried partners and friends will not get anything. When no relatives can be located, the state where the house is located will take over the assets. Other laws apply to divorcing couples, same-sex couples, and common-law marriages if one partner passes away, and most states will not allow stepchildren who are not legally adopted by the deceased person to claim the property. Unless you plan out your estate and file the proper paperwork, you and your successors will have little control as to who gets what.
To ensure that your home’s ownership is transferred according to your preference, you will need to create a will. This is a legally binding document that specifies your final wishes. You can name beneficiaries as the recipients of your money, personal belongings, property, and other assets. After your passing, the will goes into probate – a legally supervised process designed to ensure that your wishes are carried out and the assets are transferred to the beneficiaries according to the terms of the will. If there are outstanding debts owed, these must be paid before the assets get distributed.
While it is not always easy, it is helpful to discuss who will inherit the home before creating a will. Input from loved ones can help you decide who will get the house. You may not be aware that one of your children does not want to own the house. or that another one has their heart set on it, unless they tell you. People often put off these discussions but sharing this information can help with your decision. It can create arguments and hurt feelings, too – sometimes, the best choice is to sell the home and share the proceeds.
Can I Put My Home in a Living Trust?
Living trusts differ from wills, because they allow you to manage assets when you are still alive and enable you to have more control as to what happens to your assets once you pass away. They also eliminate the need of having to go through probate, so there are fewer expenses and delays for beneficiaries to deal with. Living trusts require assets to be transferred to beneficiaries after the property owner, or trustor, passes away. Trusts only becomes operational once the trustor passes, and there are no attorney or court fees associated with this. Another benefit of living trusts is that they keep your information private. When wills go through probate, they are filed with a court so that the information is available to the public.
When you set up a living trust, you designate a trustee who will oversee the administration of your estate. Beneficiaries receive assets, including property, according to the terms that you set up. If there are disagreements and problems, the trustee will oversee the difficult decisions. It is difficult to change an irrevocable trust, which is why many people use these tools in their estate planning. With revocable trusts, you can make changes to it during your lifetime, and once you pass, it becomes irrevocable.
Who Gets the House if I Get Divorced?
The answer to this depends on different things like child custody and mortgage payments. If one spouse has primary custody the children, they normally stay in the house with the children unless the ex-couple cannot afford the home payments. Without children in the picture, the two parties need to work out what to do about the house. Oftentimes it is best to sell the house and share the proceeds, but sometimes one person is attached to the house and will not want to sell. If the house is to be appraised and sold, there are a lot of things to consider before doing so – these are also important for anyone who may be inheriting a house.
Older houses might need a lot of work, which can be costly. Having to replace an HVAC system, whole-house painting and floor replacement are examples of big monetary investments that may or may not be worth the cost. Current real estate prices and interest rates will influence the best time to sell a home, so it could be better to act right away or hold off for a while.
Though tax laws change frequently, mortgage payments and property taxes can be tax-deductible, and rent usually is not. It could be to one’s advantage to move out of a rental and start paying on a mortgage. Insurance and other home ownership costs should also be researched. If a divorcing couple has children, their needs should also be considered as well, since the double-disruption of a divorce and a move can trouble children.
Contact a New Jersey Wills, Trusts, and Estates Lawyer from Herold Law to Guide You Through All the Aspects of Comprehensive Estate Planning
Many people do not relish the idea of estate planning, but making the time and effort to do so will ensure that your wishes are carried out and that your loved ones are protected. An experienced New Jersey wills, trusts, and estates lawyer at Herold Law can guide you through this process. For a confidential consultation, call our Warren, New Jersey office at 908-647-1022 or complete our online form. We serve clients in Warren and Plainfield.