How Is a Multigenerational Family Home Inherited?

Please Share!

Multigenerational estate planning should be completed with an experienced estate planning attorney.

Families are an essential consideration in estate planning.

Sometimes family dynamics are fraught with tension.

Other families share deep relationships and connections among and between the generations.

According to a recent Kiplinger article titled “How to Handle Estate Planning for Multigenerational Living Arrangements, both families require strategic estate planning to address possible complications.

Multigenerational families tend to benefit from estate planning
Estate planning is especially important for multigenerational households.

Although many people think estate planning is only important to protect assets from family members who are addicts, who have creditor issues, or who have untrustworthy spouses, happy families also need estate planning.

Consider a close multigenerational family where three generations live in the same home, like the “Ewing family” in the television series “Dallas” back in the day.

This can cause issues with the transfer of the home.

Sometimes grandparents can be living in a room or apartment on the property of an adult child.

Other times, an adult child may move in with the parents who require caregiving.

These can lead to questions regarding home ownership and unequal inheritances.

Consider the question of home ownership.

Homeownership has implications for the future residential security of all who dwell there when a place has multigenerational occupancy.

Ownership can be addressed through the titling of the property through tenants in common or joint ownership, the creation of a trust, a family partnership, or some other arrangement.

Many multigenerational families choose a trust to address home ownership.

With the trust, the makers of the trust can include detailed directions for who has the right of first refusal to purchase the property after the death of the trustmaker, how inheritance can be equalized based on gifts made while the trustmaker was alive, and how taxes will be paid.

Trusts are also beneficial for death and incapacity planning to provide greater security for future generations.

Other families utilize a Limited Liability Corporation (LLC) or a Limited Liability Partnership (LLP).

Like a trust, LLPs, and LLCs can maintain the protection and privacy of assets.

These can also provide for fractional property ownership and specify responsibility for daily operations, how ownership interests are divided, and how expenses are to be paid.

The LLC or LLP can also leverage intrafamily loans for upgrades or maintenance.

What if the multigenerational family living situation involves an adult caregiver for aging parents?

Families will want to address whether to monetize or offset the cost of this support, especially if other siblings are uninvolved in the care.

Working with an experienced estate planning attorney is essential in the complex and often emotional planning of multigenerational family households.

Reference: Kiplinger (June 29, 2023) “How to Handle Estate Planning for Multigenerational Living Arrangements

Get All The Marketing Updates
Recent Posts
Search Our 2,400 Blog Post Archive