A common concern for parents as they start getting older is how they are going to pass their house to their children. Estate planning is where this often comes into play, but people tend to explore other options as well. Let’s look at all of them and determine what is the best way to leave your house to your children. Collins Law serves the greater Milwaukee area here in Wisconsin with estate planning services and we are ready to help.
Options to Pass Your House to Your Children
Your children mean the world to you, and your house may be the biggest asset that you leave behind. Some may even have multiple houses to distribute, but what are the best ways to handle it? Let’s get into it.
Should You Sell Your Home to Your Kids
This is an option if you no longer want to control the home while you are alive. This has a couple of problems though as you will lose control of your house (assuming you were still planning to live there) and your kids have to pay for the house. This could be fine or even preferable for some, but others may not want to go this route.
Before you get any ideas of selling your house to your kids for a dollar, know that this won’t fly. You have to sell it for a fair market value, otherwise the difference between the fair market value and the price you sold it for can be considered a gift and subject to taxes, which brings us to our next point.
Can You Gift Your House to Your Children?
The ideal way to gift your house to your children during your lifetime is to utilize an irrevocable trust. This will protect the house against creditors and it can also have terms in the trust to allow you to continue to live in it. Without such a trust, the house will be subject to higher gift taxes. However there are still additional tax concerns when transferring assets during your lifetime, it’s advisable to do so at the time of your death.
Utilize a Revocable Living Trust to Transfer Property to Your Children
A revocable living trust is our favorite option for handling how your assets and property transfers to your children or other beneficiaries. These revocable living trusts can be changed while you are still alive and can be set up with successor trustees too so that there will always be continuity of property management.
Can You Add Transfer-on-Death to Your Deed in Wisconsin?
Wisconsin is one of the 25 states that allow you to transfer property to heirs on death. This is a little more simplified and less rigorous than a revocable living trust, but it can be changed at any time, avoids probate, and it applies to where the property physically is as opposed to your permanent address. In other words, if you don’t live in Wisconsin, but your property is in Wisconsin, then you can use this on your Wisconsin properties.
Estate Planning Services in Southeast Wisconsin
Located in Wauwatosa, Wisconsin, Collins Law is here to help you with all your estate planning. We can set up a revocable living trust for you and talk you through all your options for all your assets. Do not hesitate to reach out to us.
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