Do you want to leave your property to a loved one in your will but aren’t sure how? Perhaps you want to know what will happen to your mortgage once you pass away. Finding answers and clarifying how to leave a house to someone in a will can help ensure that you’ve dealt with all tax, deeds, and other necessities when creating your last will and testament.
We know how difficult writing your own will can be. You want to ensure that once you pass away, your house and other assets are left to the people that you care about. But there are many factors to consider. Consider deeds, titles, any taxes, or outstanding mortgage payments and how it may impact your beneficiaries.
You find that no matter how hard you search, you just can’t get the answers that you need. You don’t want to leave it too late, you want to be prepared and have a will in place, but how can you write it and leave your home to your loved one with ease?
Well, we are here to provide you with the answers that you need. Keep reading to find out everything you need to know about different property types and how you can leave a house to someone in your will. Don’t forget to check out our fantastic will writing services online that allow you to create your own will with ease!
Putting A Will In Place
End-of-life planning isn’t easy, but it is essential. In the absence of a will, probate can be a long, drawn out and emotionally messy process. You can make things easier for those left behind by writing a will, setting up a living trust or modifying the deed to your home.
How To Leave A House To Someone In A Will
Here’s how to leave a house to someone in a will and other factors to consider when creating your last will and testament. There are a few different ways that you can do this, so let's take a look and see what option is best for you.
Create A Will
Perhaps the most obvious way to leave your home to someone is to first create a will. You can do this with an attorney, or use a will writing service online. Within the will, you can state who you want your house to be left to. Learning how to leave a house to someone in a will might require further research for your specific property type.
You can list more than one person if you want, and the value of the house will be split equally between them. The recipients can then decide what to do with the property. They might want to keep their stake in the house, sell it to another recipient, or sell the house and split the profits.
Before they receive the house, any unpaid or outstanding debt must be paid. If your mortgage is not yet completed, then any final payments must be made. You might do this with any savings or life insurance payouts that would occur, or your loved ones might decide to move into the property and complete the payments themselves. They might also decide to sell the home to pay off the remaining mortgage.
A Transfer Upon Death
If you own your home in your name, the ownership stays with you after you pass away, which can be problematic when leaving your home to someone. For them to own it, you need the title to be transferred into their name. Without doing this, your loved ones will need to go through probate to prove they are entitled to the home (usually we see this with next of kin). But there is another option, a transfer upon death deed (TOD).
Now, you can’t access these in all states; only half the states allow you to do this. But if you live in one of those states, then you can sign a deed that states who should receive your home when you pass away. Those you want to leave the house too won’t have any legal right to the property until you pass away.
This is a good way to avoid the lengthy process of probate, and it tends to be cheaper than other methods.
However, you need to keep them up to date with contingency plans to avoid any issues after you pass away. You don’t want to leave your home to the wrong person!
Use A Living Trust
Another option is a living trust which allows you to transfer your assets to a trustee on behalf of the beneficiaries. This means that you can still get the benefit while you are living. Again, this avoids probate and allows you to leave your house to several people, but put one in charge. The trustee will decide how the property will be managed and you can still live there.
With a living trust, the mortgage or other debts must be paid before they can be transferred to the beneficiary. Again, you might want to use your funds to do this, or your loved ones could use a life insurance payout when you pass away.
Leaving your home as a living trust can help with any conflict that can arise from a will. Now there is one person in charge who decides what will happen to the property. Not everyone agrees with it, but it’s a good way to avoid any issues.
Change Your Deed
Finally, you can change the deed of your home. We touched on this earlier with a TOD, but some other methods are worth looking at. You can create a statement that covers what will happen to the property at the point of your death, and these are super handy for people who do not live alone. Let’s take a look at them.
The first is a Joint Tenancy with the Right of Survivorship. If someone else owns the home with you, then the property will transfer into their name when you die. Say you and your partner bought your house together and decided to add a child as a Joint Tenant. They would now own a third of your house, and at the point of your death half. After your partner passes away, they would become the sole owner.
It’s a good way to avoid probate, but you would now be a co-owner and not have complete control over your home. If you wanted to sell or remortgage your home, you would need consent from both owners. You also need to be mindful of any debt a co-owner has, as they might use the house as a way to get credit, or you could lose it to pay for their debt.
Be sure that you carefully consider these options before signing a joint property with the right of survivorship form.
Another option is a Tenant by the Entireties which can only be used when the property owners are married to one another. This is trickier to come by as only half the states recognize it, but it is an option worth exploring if you want to avoid probate when leaving your house to someone.
Taxes On Inheritance Property
Part of how to leave a house to someone in a will is understanding the tax implications of assets inherited.
We pay tax on everything, so it’s understandable to wonder about the tax that might be paid on your property when you die. If there is any outstanding tax that has not been paid by yourself, then this will need to be paid before your home can be passed to your loved one. Just like with any debt, anything attached to the home must be settled before probate or any passing of the property can begin.
But the laws surrounding estate tax are slightly different. Not everyone needs to pay tax on a house that they inherit. The rules on this can vary from state to state, so it is best to check the laws in your state before proceeding. If you are unsure about them, it is best to speak to an attorney who can provide you with the most accurate and up-to-date information. Laws can also change, so be sure that you check regularly to avoid any issues in your will.
Generally, if the total amount of your estate is less than $12.06 million, there will be no estate taxes to pay. This would include any savings or other money in your estate. If the value is less than this, then you don’t need to worry and can leave the house in your will as planned.
There might be capital gains tax that your loved ones would pay if they sell the house, but again this can vary from state to state. There are also ways around this, and paying the tax if your estate is worth more than $12.06 million. We recommend speaking to an attorney about these if you have any questions, but here are some options that you can consider:
Put the property into a trust with your loved ones listed as beneficiaries
Gift the house
Turn it into an investment property
Turn the home into your primary residence
Some of these can be done by yourself, whereas others will need to be done by your loved one once you have passed away. It is worth speaking to an attorney about some of these so that you are following all the correct legal procedures. It’s worth checking out some estate planning tips for further help with this too!
Is Probate Necessary?
Now you might be wondering, what about probate? Does that need to happen? Well, even though it’s a common part of executing a will, probate doesn’t necessarily need to happen.
Not every will goes through probate, and more often than not, it isn’t even a legal requirement! Not every state needs you to go through probate, and we recommend checking the laws surrounding probate in your state before ruling it out. Not all procedures need probate either as we have seen today.
You can request to not have probate, but be mindful that if it is a legal requirement in your state, then it will need to happen.
Like all procedures, there are advantages and disadvantages to having probate. It can be a time-consuming process, but it does ensure that your house and other assets pass legally to those you have left them to. If you want that added layer of protection, then probate is worth doing. If not, you can probably skip this added step.
Create An Online Will
And there you have it, how to leave a house to someone in your will. There are a few different ways that you can leave your home to a loved one in your will, and you must consider your options carefully and select the right method for you.
Once you have done this, writing your will isn’t too challenging, especially when using the tools at Wills.com where you can write your will with ease!