Should You Give Your House To Your Family While You Are Alive or Wait Until You Die?

This is a question I’ve been getting a lot recently, so I figured I’d take some time today and break down for you some of the things you should be thinking about if you are considering either of these routes.

Note: these are not ALL of the options available, just SOME of them. If you want them all, click here and schedule a time to talk with me.

Giving Your Home Away While You Are Alive

To begin, there aren’t a lot of advantages to giving your home away while you are alive, other than having a chance to see your family enjoy it (if you don’t want it any more).

There aren’t any tax benefits. In fact there are some tax consequences.

First, there won’t be any income or capital gains taxes to be be paid on the transfer of the home (assuming you transfer it within your family).

But, if and/or when your family sells it down the road they will have to pay taxes on that sale based on what YOU paid for it (there is no “step-up” in basis.”

There may also be some excise taxes due on the transfer of your home while you are alive.

Giving Away Your Home Via Your Estate Plan

Unlike while you are alive, transfers after death carry some great benefits.

First, there won’t be any income, capital gains, or excise taxes owed on the transfer of the property to your family.

AND, if and when they do sell it, they will get a step-up in basis to the value of the home on the day you passed away (i.e. they will likely save a significant amount in taxes).

There is at least one potential downside to waiting to transfer your home at death, and that is the amount of expenses you’ve got that need to be paid for.

If your home is a significant asset, it’s possible that it could need to be sold to pay off your debts.

In that case, there’s a chance your family won’t wind up with the house.

That’s probably enough for now. If you want the full scoop you’ve got to watch the episode.

And, when you’re done, If you want to talk more about your own estate planning needs and wants, click here and schedule a strategy session.