When parents are preparing their estate plans, they usually want to leave as much of their assets and property to their children as possible. When considering how to transfer ownership, it’s often preferable to avoid going through probate. For a parent and homeowner, this raises the question: What is the best way to leave my house to my adult child?
Joint Tenancy with Right of Survivorship
One option that seems simple enough is to hold the property in a joint tenancy with a right of survivorship. In doing so, when one joint tenant or co-owner of the property dies, his or her interest will automatically pass to the surviving joint tenant. The other tenant, in this case, your adult child, could have the property without having to go through probate. However, when your child passes away, the property will most likely have to go through probate unless it is placed in another joint tenancy or trust. This transfer of ownership method also deprives the surviving joint tenant of the tax advantages he or she could obtain through a living trust.
Leave the Property Through a Will
Another way to give your adult child your home is to leave the property to them through your will. By using this method, your heir will have to go through the time and expense of a probate case. If you prefer to keep these types of matters private, that will not be possible with a public probate case. However, unless your property is extremely valuable, there will not be any federal estate or gift taxes on the bequest.
Place the Property in a Trust
You also have the choice of placing your property into a living trust and naming your adult child as a beneficiary of the trust. You can also be a beneficiary and serve as the trustee. When you pass away, the property can remain in the trust for your adult child’s benefit or pass to him or her according to the trust terms. The home would not be part of the probate estate and therefore, would not be part of the probate process. A trust administration is also private, and your actions regarding the estate would not be a matter of public record. There may also be tax benefits that can be realized by using a trust rather than a will to pass the property.
At the Law Offices of Alice A. Salvo, we have experience helping clients determine the best estate planning tools for their circumstances. Schedule a free consultation today to start planning your solution.