Planning your estate can be more difficult when you have multiple children who might inherit your assets. As much as you want to create a highly individualized estate plan, you also have to think about fairness and how your children will perceive your decisions.
Often, the best way to avoid the risk of disputes caused by your estate plan is to ensure that all of your children receive equivalent inheritances. How can you arrange a fair and roughly equal legacy if you think one of your children might want to inherit your home?
Give your child an option to buy the house rather than to inherit it
If your goal is to leave fair inheritances for each of your children, then simply leaving your house to one of them would be the wrong choice. For most Americans, their home will be their single most valuable asset. Giving one child your home would be incredibly unfair to the other children in the family, who may not inherit much of anything.
Rather than leaving your house to the child who wants it, you could instruct your executor to sell the house and distribute the proceeds among your heirs. You can add a clause offering the child with an interest in the property the first right of refusal.
That way, a family member with an emotional attachment to the property can still own it without depriving their siblings of its fair value. They can purchase the property for a fair market value, allowing everyone in the family to benefit from the transaction and keep the home.
Exploring creative estate planning solutions can help you leave behind a meaningful and appropriate legacy for the people that you love.