Transfer Home to Kids
We own a home in Indiana. What is the easiest way to transfer ownership to our kids? Is there a way to do this without using a will or trust? Is there an equivalent of a beneficiary designation form for transferring a home?
Terry Says
That is probably NOT a good idea, especially if you have owned the home for a long time! In that case you may have a big gain, potentially more than the $500,000 exclusion on a joint tax return for selling the home.
If you die while owning the home, your kids get a “step-up” in cost basis to the value on date of death. Then if they sell it, there will be no taxes.
This is NOT a do-it-yourself project. The likely best way to deal with this issue is to go to an estate-planning attorney in your state and create a Revocable Living Trust. Then RE-TITLE the house in the name of the trust. If one or both of you is incapacitated, or dies, then the successor trustee you named can deal with the issues related to the house.
Please watch this video: https://www.terrysavage.com/wp-content/uploads/2022/10/Terry-Talks-Wills-Trusts-Estate-Planning.mp4
And, again, if you are moving out and don’t want the house — and have less than a $500,000 gain — then just SELL it to your children. But don’t think you are solving any estate problems by doing it this way~!~
