You should to talk with your CPA or financial advisor and estate attorney to understand the implications and benefits of either selling your mountain dream home or passing the property down to your children. It may be wise to put the property into a trust, along with money to cover its operating costs for at least ten years (depending on the financial situation of your children). You will need to decide if you want to transfer the property to a trust now, or wait until your death and have the home part of the estate. Putting the property in a trust and transferring ownership can help to avoid estate taxes. What you want to ensure is that your mountain home will not go through costly and time-consuming probate. If not handled properly, and if the home is in a different state from your main residence, your heirs may have the complication and legal fees associated with going through probate in two states. There are no simple answers to how to set all of this up; federal and state tax, and estate and gifting laws are subject to change even after you set up your strategy.
Of course, all of this depends on whether your children even want the home. If you have one child it may be easy, but with multiple children you may be creating a future mess as there will be challenges having to do with when each child gets to use the home, who pays the bills, who oversees the service providers, who keeps tabs on the condition of the home, who makes decisions about repairs or remodeling, and at some point, decisions about selling the mountain dream home, etc.
It is a good idea to discuss all of this with your children. In the end, it may be better to sell your mountain dream home and put the proceeds in your estate, a gift, a trust, or a 529 plan for the grandkids’ college education.
How can I help you? I have over 30 years of sales and marketing experience and am a top real estate agent in the mountain town of Crested Butte, Colorado representing affluent clients who are buying and selling their dream homes and ranch properties in the mountains. To see featured properties or search the MLS – visit chriskopf.com. How is the Crested Butte Real Estate Market doing? Click this link to see my monthly Crested Butte Real Estate Market Reports. If selling your mountain dream home is in your future, I appreciate the opportunity to earn your business and be your Crested Butte Real Estate Agent.
Chris Kopf, Coldwell Banker Bighorn Realty
Previews® Property Specialist