Why You Should Leave Your Home To Your Children

For many retirees, the family home isn’t something they want to keep. Many sell the nest and move on to smaller dwellings. The costs and maintenance are lower.

But what if you chose to leave your house to your children? That makes sense because the price of decent housing has escalated rapidly over the past year. Many Millennials and Gen Xers can’t afford to buy a home.

According to the Squared Away blog, “a new study has an answer: retirees have every intention of letting family members inherit their homes. The people in the study who expressed a stronger desire to leave an inheritance of at least $10,000 were much less likely to sell their homes before they died – with the intention that the house would be part, if not all, of that inheritance.”

Then there’s the bounty of home equity, which is a store of wealth. While your children may not inherit cash, stocks or bonds, the value in a home is worth quite a bit — especially if there’s no mortgage.

“There is also a financial advantage to the owner of not selling the house to avoid the capital gains tax, especially if the price appreciated dramatically during their lifetimes. The researchers didn’t account for this incentive in their analysis,” the blog added. “But they did find that the desire to leave a bequest is so compelling that parents held on to their homes even after predicting they might need to pay for nursing home care within a few years.”

“Instead of using home equity for their own needs, many retirees seem determined to leave something to their children.”

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