What adult children should know about estate planning and real estate
What Adult Children Should Know About Estate Planning and Real Estate
By Allen Deaver, Asset Realty
As our parents age, conversations around estate planning and real estate often become necessary but difficult topics. Whether it’s preparing for the future or responding to sudden health changes, understanding how real estate fits into an estate plan is crucial for adult children who want to support their loved ones and avoid legal or financial surprises.
Here’s what every adult child should know about estate planning and real estate:
Start the Conversation Early
Don’t wait for a crisis. Talk to your parents about their long-term wishes, especially regarding their home and any other properties they own. Understanding their intentions now—whether they plan to stay in their home, downsize, or leave it to heirs—can help you plan ahead and respect their wishes.
Know What’s in the Estate Plan
Ask if your parents have a will or trust and when it was last updated. Real estate should be clearly addressed in these documents. Key questions include:
Who will inherit the property?
Is there a designated executor or trustee?
Are there provisions for selling or renting the property?
If there’s no plan in place, now’s the time to encourage them to meet with an estate planning attorney.
Understand Ownership and Title
How the property is titled (individual name, joint tenancy, living trust, etc.) affects what happens to it after your parents pass. For example:
Joint tenancy typically means automatic transfer to the surviving owner.
A home in a trust can avoid probate, saving time and money.
Knowing the title status helps avoid confusion and delays in the future.
Be Aware of Potential Taxes and Liabilities
Real estate can come with tax consequences:
Capital gains tax may apply if the property is sold for more than its value at inheritance.
Property taxes can increase depending on local regulations or a change in ownership.
Maintenance costs, insurance, and mortgage obligations may also fall on heirs.
Consult a CPA or estate attorney to understand what financial responsibilities might arise.
Plan for Property Maintenance or Sale
If you or your siblings inherit a home, will someone live in it, rent it, or sell it? Discuss the long-term plans ahead of time to avoid disputes or rushed decisions during a time of grief. It's wise to also get a sense of the home’s current value and condition, especially if a sale may be necessary to settle the estate.
Address Long-Term Care Considerations
If a parent needs assisted living, their home may be their largest asset. Selling it might be necessary to pay for care. In some cases, Medicaid planning rules can complicate the sale or transfer of a home. Involving a qualified elder law attorney can help navigate these situations without jeopardizing care options.
Keep Good Records
Encourage your parents to maintain updated records of property deeds, mortgage statements, tax documents, insurance, and utility accounts. Having this information easily accessible will make managing or transferring the property smoother when the time comes.
Final Thoughts
Estate planning isn’t just about legal documents—it’s about preserving peace of mind for your family. As an experienced real estate professional in Central Texas, I’ve helped many families navigate these complex situations with clarity and compassion.
If you have questions about selling a family home, preparing for a transition, or simply need a real estate resource, feel free to reach out. I’m here to help.
