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Leaving a House to the Kids

FaithFi: Faith & Finance | Mar 28, 2023


Show Notes

Often when parents make out a will, they simply divide their assets equally among their children, including property. But maybe that’s asking for trouble. We’ll talk about that  on Faith and Finance.

  • One of the most common sentences included in a will is this: “My estate will be divided equally among my children.”
  • That’s fairly easy to do when the estate consists entirely of financial accounts that can quickly be converted to cash for distribution to heirs.
  • It’s quite another thing when the estate contains property, as most do. It immediately forces your heirs— usually your children— to make a difficult decision. Do they continue to hold the property in joint ownership? Or do they sell it and divide the proceeds? A third option exists if one or more heirs are willing to “buy out” the others.
  • Ideally, the heirs will all agree on a fair and equitable settlement. That usually means selling the home and splitting the proceeds. Or, the heirs could decide to divide up other assets so that one or more heirs are able to hold onto the property. But far too often, heirs have trouble reaching that kind of agreement.
  • Deciding as a group what to do with property becomes a complicated business. There are serious financial and emotional considerations.
  • Financially, what you think is a blessing may actually become a burden when you factor in maintenance costs, taxes, insurance, homeowners association fees, and other expenses. Who makes decisions about maintenance and hires contractors to perform needed work? Will the heirs divide those expenses equally? What happens if one heir doesn’t pay his or her share?
  • Sometimes, depending on location, the property becomes something like a “timeshare” for the various heirs and their families. But then who determines the schedule for using the place?
  • Emotionally, inheriting real estate may cause heirs to make unwise decisions based on feelings, rather than wise money management.
  • In many cases, the family home becomes a money pit that fosters arguments among surviving children who can’t even agree on minor things like what color to paint the living room.
  • Children often have different ideas about what to do with inherited property, based on their experiences growing up. Resentments that were hidden for years may boil up to the surface when Mom and Dad aren’t around anymore.
  • This is often made worse when one sibling is made executor of the estate. That person is then in a position to “lord it over” the others. Or the opposite can happen, with the executor heir taking grief from siblings who all demand different things. Handling the estate becomes a nightmare for them as siblings squabble. So as a side note, consider appointing an outside executor or personal representative for your estate.
  • To avoid these potential problems with leaving a house in joint ownership to your heirs, many experts suggest you handle it like any other asset in your will. Simply stipulate in your will that upon your death, all property will be sold and that the proceeds then are to be divided among your heirs.
  • When you do that, some heirs may decide to take the proceeds of that sale as part of their share in the estate. Others may want to “buy out” the others if they want to take on full ownership of the home or vacation property.
  • You don’t always have to divide the proceeds equally among your heirs. In his book "Splitting Heirs,” financial teacher and author Ron Blue says that “if you love your children equally, you’ll treat them uniquely” in your will.
  • Some may have greater needs than others. Some may not be able to handle money as well as others. In those cases, dividing things equally may not be best for your heirs.
  • But the key to making any of this work is transparency. You should discuss your wishes with your family so that no one is surprised after you go home to the Lord. Everyone needs to understand not only your decisions, but why you made them.
  • By having serious discussions about your estate ahead of time, you can eliminate the potential for infighting and resentment later, especially if you make it known that all real property is to be sold upon your death. That’s one less thing your heirs can squabble about.
  • If you need help drawing up a will  —or changing one— it’s important to work with an estate attorney who shares your Christian worldview. You can do that by finding a Certified Kingdom Advisor. Just go to FaithFi.com/find.

On this program, Rob also answers listener questions: 

  • How do you determine whether to leave funds in a 403(b)?
  • How should you go about selecting a financial advisor?


Remember, you can call in to ask your questions most days at (800) 525-7000. Also, visit our website at FaithFi.com where you can join the FaithFi Community, and give as we expand our outreach. 


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