The Family Home: 3 Ways to Handle

3 Nov 2022 · 1 min

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In this advisory video, the speaker addresses a common estate‑planning dilemma: how to transfer the family home when one child wishes to keep and live in it while the other siblings do not. He outlines three practical strategies to achieve a fair outcome. The first method involves appraising the home’s value and providing the non‑resident siblings with an equivalent cash payment, which requires sufficient assets in the estate. If the estate lacks the liquidity for this, the second option is to purchase a life‑insurance policy equal to the home’s value, naming the other child as the beneficiary and using the policy’s cash value to fund the buy‑out. When neither cash nor insurance is feasible, the third approach is to structure a formal buy‑out, allowing the child who wants the house to purchase it from the others under the same terms as a regular sale, incorporated into the inheritance plan. The video concludes with a brief call to action for further guidance.

Chapters

The family home. I've had many people come to me with concerns about how to pass the family home onto their children. It often involves a scenario where one of the kids wants to keep the home and live in it, and the others do not. How do you do that and still make it fair to the other kids? Here are 3 pretty good ways to handle this situation. The first way would be to determine the value of the home and then provide an equal amount of money to the other kids. This means that the estate has to be large enough and have enough assets in it to accommodate those numbers for the other children. If there are not enough assets in the estate to do that, option 2 would be to get a life insurance policy equal to the value of the home and put that in the name of the other child and give them enough money each year to pay the premiums. If there's not enough money to do 1 or 2, then the 3rd option is to give that child who wants the house a way to buy the house from the other kids. Provide a structure for that within your inheritance plan that would be similar to any other sale of the home. That's how you handle the family home. Now follow me and I'll straighten out the rest of your life.