Homeownership is supposed to be the American dream, for some, that dream takes decades to achieve. If you own your home and are considering leaving it to your children, there are some things to think about. These are the top reasons why you don’t want to.
Legal Issues
If you have any outstanding legal issues, then it is best not to leave the home to your children. When someone is going through litigation, bankruptcy, or divorce, the house can be tied up in a legal case. If you leave your house to your children, they may be forced to sell the property upon your death and then pay the proceeds to settle the claims.
Personal Debts
If you have personal debts, people can put a lean on your home. With a lean on the house, your children can be forced to sell the house to pay off whatever you did not pay back before your passing. That means you will be leaving them your debt as well as your home.
Different Goals
Just because your dream was to own a home, that doesn’t necessarily mean that it is your children’s. Once more, wherever the home is is where they will be tied. Leaving your home to them could mean that they would need to relocate and assume the home’s responsibilities, which can just put undo burden on them. If they have obligations elsewhere, it is best to come up with another plan for your home.
Financial Burden
Just because your home’s mortgage might be low or even paid off, that doesn’t mean that there aren’t financial obligations tied to the ownership of it. Things like taxes and insurance can be far too great for your children. You don’t want to leave them with more stress than they find comfort in inheriting your home.
Emotionally Not Suited
You might have fond memories attached to your home, and your children might not. The way that you feel emotionally about your home doesn’t always translate to your children. So, although you would like to keep it in the family, that might not be their dream. Many adult children would like to start their own family memories in a new home and relish in the memories they already hold and keep from their childhood home.
Inequity Issues
The last thing you want to do is leave behind a source of contention that will tear your children’s relationships apart. Death can bring out the worst or the best in people, and money can too. If one child feels as if they have not gotten their “fair” share, then it might leave resentment for the future. Also, dividing out what is in the house just puts stress on your children. If so, you might not be doing them the favor that you think.
Market Conditions
Your home will be worth whatever market conditions support. There is a real possibility that the house they inherit might not be worth what you owe on the house, leaving them to pay off your debt. If they can’t pay for the difference, then they will likely have to sell it fast, which would lead to a real loss if the market is in a downtrend.
Estate Planning is A LOT
When you are dealing with estate planning, there are often unforeseen administrative costs. If you leave your home to your children, there is the potential that there are legal things that you haven’t anticipated, which will put a financial burden on your kids. Make sure that you have everything covered whether you leave them your house, or not.
Family Conflict
What if you have more than one child and more than one wants the house? If you leave it to them both, that can lead to a huge fight and the house pitting them against one another. If they don’t agree on what to do with the house, that will require that they go through legal channels, which rarely ever goes well or leaves anyone with good feelings.
Tax Problems
Depending on where your home is located, there can be high estate taxes that your children will have to pay if you leave your home to them. Once more, if the home has appreciated a lot, then they will have to pay capital gains taxes, which will come straight out of their pocket. You might not even have the equity in the house to cover the taxes. That also can lead to them having to sell the home and losses for everyone.
Upkeep and Maintenance Costs
A house can be expensive when there are home maintenance issues or repairs necessary. If your children aren’t ready for that type of financial responsibility, it is going to put a strain on their monthly budgets. Once more, if they already have a family of their own and responsibilities, homeowner tasks can take a considerable amount of their time and energy that they might not want to give up.
Neighborhood Issues
Just because it was a great home for you to raise your children in, things change. If the community has changed significantly over time, you can put them into a less-than-ideal situation. Things like the quality of schools, crime, and commuting can also put a burden on your children. It will also bring down the value of your home, meaning they will get much less than you probably anticipate if they sell the home.
Better Use of Equity
If you have equity built up in the home, it might be nicer to allow your children to decide for themselves where they want to invest. Whether that is in a home or other investment, the equity you have might better suit them to pursue their own financial endeavor over taking over yours.
Differing Attitudes About Homeownership
Homeownership has traditionally been the American dream but attitudes are changing and many are seeing it as a weigh-down rather than a sign of “making it.” If your children would rather throw their investment into something else and not be tied down, leaving them your home might be the very thing they don’t want. If you gift them something as major as a home and that is not what they want for themselves, it will just be a big stressor and burden to deal with. Likely, it will also come with some guilt at giving away something you want them to have and cared for.
Renting
If the market doesn’t support the sale of the house, they can’t live in it, and they can’t sell it, then there is always the option of renting. Being a landlord, however, does come with a lot of responsibilities and obligations that might not be worth it for them. Even if your home would make a good rental, not everyone is good at renting it out or managing a rental home.
Structural or Environmental Issues
Unless you have attempted to sell your home, there is no way for you to know for sure that there aren’t some unforeseen things. If you have a structural issue, or an environmental one, that could limit the ability your children have to sell the home if they choose. It can also mean that they would have a great expense cleaning it up to make it livable and safe for their family, or another one.
Emotional Toll
Even if the house you leave your child is a financial win, the emotional cost might be too great. Not everyone can handle moving back home with the loss that they feel. Their childhood home included you and without you there, it might just exaggerate their feelings of loss and sadness. Not everyone can live in a constant reminder of what is no longer there.
Is It Your Dream Or Theirs?
Homeownership has been the dream for many generations, but things have changed. If you want to leave your home to your children when you are gone, it is best to make sure that your dream for them is their dream as well. If not, you can be setting them up for a very stressful, expensive, and emotionally hard time to clean up after you are gone.
30 Traditional Sayings That Are Now Considered Offensive by Woke Culture
30 Traditional Sayings That Are Now Considered Offensive by Woke Culture
21 Habits Often Associated With Having a Lower Social Status
21 Habits Often Associated With Having a Lower Social Status
25 Social Issues Gen Z are Determined to Cancel
