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Inheriting the Family House?

75% of parents plan to leave their house to their kids … but do they even want it?

Leaving a home as an inheritance to children has long been a popular method of transferring wealth, as noted by financial advisors and estate planners. While there is no recent national data on home inheritances, a survey conducted by Charles Schwab in 2023 revealed that over three-quarters of parents plan to leave their children a home upon their passing. However, it is important to consider whether the children actually desire to inherit the property.

Although some children may have sentimental reasons for keeping the inherited home, many opt to sell it due to financial considerations and the simplicity of unloading a property. In fact, the survey found that nearly 70% of those who expect to inherit a home plan to sell it. This decision is often influenced by the fact that the children already have their own homes nearby and cannot justify the expenses of maintaining an additional property. In such situations, it is advisable to consult a professional team like the 716 Family of Companies to determine whether selling the property, renting it out long-term, or even short-term rentals would be the best course of action.

It is worth acknowledging that rising costs, including inflation, have made repairs and upkeep on older properties more expensive. Consequently, some individuals prefer newer properties that are more affordable to maintain and insure. However, the survey also revealed that many children express a desire to keep vacation homes that they inherit. Investing in a getaway property for your children as you age may prove to be a wise decision. 

The decreasing interest in retaining the family home is part of a larger generational trend among inheritors, as estate planners have observed. Tangible assets, such as old furniture and mementos, are often not valued as highly as they once were due to changing tastes. Consequently, these items are often sold. It is important to keep in mind that material possessions cannot be taken with us, and planning to downsize can be a beneficial undertaking. This process often allows clients to purge items from the family home accumulated over many years.

While Mom and Dad’s home may be desirable, the children may not see themselves living in it and may find the cost of renovating it to their style prohibitive. However, vacation homes and secondary properties are more likely to be retained by the children, at least for a few years, particularly if the location is appealing. In cases where multiple family members are inheriting a vacation property, it is essential to establish a fair method of splitting maintenance costs and creating a usage schedule that satisfies everyone involved. Our 716 Vacation Rentals division can provide assistance in this regard.

About the Author and Broker:

Gregory Straus started building his real estate business in 2013, trademarked 716 Realty Group in 2017, and is the Real Estate Broker and CEO of 716 Realty Group WNY. Over his career he has managed a team of realtors closing 2900+ transactions and $650,000,000 in sales volume.

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