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How to Ensure that your Home Is Passed on to your Children

There are many practical, financial, or sentimental reasons people want to leave their homes to their children. No matter your motive for wanting to do so, it is important to have an estate plan that is clear regarding property distribution. A clear estate plan help protect the best interests of both you and your family.

There are different ways of passing your home on to your children, including:

  • Selling or gifting it to them while you are still living
  • Bequeathing it to them when you die
  • Signing a “Transfer-on-Death” deed

There are legal and tax implications for all these options. It’s important to carefully consider the various pros and cons to make sure that your property does not end up becoming a burden for your children.

Below is a breakdown of each of the various options. Feel free to contact us if you have further questions.

house and gavel

Selling Your Home to Your Children

As a parent, you have the right to sell your home to your children. However, it is important that you sell at a fair market value. This means that you should sell the house at a comparable value to what similar properties are selling for in the current market. Selling the home below market value will make the exchange partially a gift, which will have its own tax implications.

You have the option to loan money to your children so that they can purchase the home, but the law will require you to charge your kids interest. Furthermore, you’ll have to declare the interest you earn as income. However, one benefit of doing this is that you can structure the loan to provide a minimum interest rate. This is calculated by the IRS, which publishes its rates for loans between relatives on a monthly basis. These rates tend to be considerably lower than commercial mortgage rates, so their monthly payments will be significantly lower as well. If you have pressing questions about your case, reach out to the estate planning professionals at Staubus and Randall.

Gifting the Property to Your Children

If you would like to give the property to your children while you are still living, one option is to use an irrevocable trust. This can help in protecting against your kids’ potential creditors. Gifting a property outright can be problematic if the recipient gets into financial trouble at some point down the line. For example, if the child has to file for bankruptcy, the property could be foreclosed and removed from the family’s ownership.

For this reason, many people consider it a better option to transfer the home after they pass away.

Bequeathing Your Property When You Pass Away

An effective means of passing your property to your children at the time of your death is to do so through a revocable living trust. This will permit you to name your kids as successor trustees, which allows for a continuity of property management. You can change revocable living trusts during your lifetime, which gives you the option of changing your mind. It also allows you to be specific about how the property should be handled after you pass.

In the event that your children do not want to live in and manage the home, the trust can sell it after you pass. If one of your children wants to keep the house, but the others don’t, you can make a compensatory equitable financial arrangement, such as leaving extra money to the child who won’t inherit the property.

Deed Transfer

The state of Texas allows homeowners to sign a Transfer-on-Death deed. This works similarly to “payable-on-death” designations for transferring assets from your bank accounts to your heirs. Transfer-on-Death deeds can be helpful in that they can avoid probate on the home. You can change the designation at any point before you pass away.

You are permitted to sign a Transfer-on-Death deed for any property you own in Texas, even if it is not your permanent residence.

lawyer and paperwork

Call an Experienced Dallas Estate Planning Attorney Today

Whichever option you choose for passing on your home, the process can be very complicated. The Dallas estate planning lawyers at Staubus and Randall have the knowledge and experience necessary to help guide you through these complexities. Whether you are having trouble deciding which path is best for you and your family, or if you are feeling confused about the required paperwork, we are here to help you at every step of the way in this important decision. Contact a member of our legal team today at 214-691-3411, and we will discuss all of your options. Let us put our experience to work for you.

The Firm

The attorneys at Staubus and Randall have over 100 years of combined experience in estate planning, probate, and litigation. We have the knowledge and skills to tackle complex legal issues, such as guardianships, will contests, fiduciary litigation, and trust litigation. We can also handle routine matters, such as estate administration, probating wills, heirship determinations, and other probate court matters.

Staubus and Randall received a preeminent AV rating from Martindale-Hubbell, which is the highest rating possible from a peer-rated legal service. This rating recognizes our hard work, dedication, and the case results we’re able to achieve.

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What Our Clients Say

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"Before retaining the guidance of the Staubus & Randall firm, I was at my wit's end trying to close an uncle's estate as a co-executor. In addition to dealing with difficult heirs, I had other pressing business issues coming up immediately on estate land in the middle of the Eagleford Shale including dealings with pipeline, seismic, oil & gas, and construction companies. The local bank also refused to give me access to information relating to the estate. This quickly became the most stressful and desperate time in my life...and then I found Joseph Legere who truly became my guardian angel. He was able to get all issues resolved efficiently and the estate fully closed. His professionalism, immense legal knowledge on a wide variety of topics, and amazing communication skills took the burdens off of me and quickly got closure. I am forever indebted to this firm for giving me my life back."


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