People often want to pass down real estate to their loved ones, but there are a few things that you must consider if you want to do this. In many cases, it’s best to discuss your wishes with your family members ahead of time so you know how they feel about your plans.
If you have any real property that you want to pass down, here are the questions you need to ask, first:
Can your loved ones handle the expenses related to the property?
There are many expenses related to property ownership that your loved ones will have to cover. This can include insurance premiums, property taxes, and upkeep costs. They might also have to pay the mortgage once you’re gone. Passing real estate to someone who can’t keep up with those expenses could make the home more of a burden than a blessing.
Is there a “due on sale” term on the mortgage?
A mortgage that has a “due on sale” clause is likely going to require that your loved ones pay the balance right away when you die. This could mean that they need to sell other assets to cover that bill. The only other options are to sell the home or to obtain a new mortgage that can pay off the “due on sale” terms.
Does the person want the property?
While leaving real estate to your loved ones is certainly admirable, you must consider what will happen if they don’t actually want the property. If you pass real estate to someone who doesn’t actually want it, they may have to sell it. They may also be liable for expenses related to the property that they aren’t prepared to pay.
Creating a comprehensive estate plan is critical if you want your final wishes to be followed. Ensuring that each component is handled in the proper manner can help to make things much easier for your family members when you pass away.