How to Pass On Your Home the Right Way A Guide to Estate Planning Options

For many families, a home is more than just a place to live—it’s a major asset and a symbol of legacy. Naturally, one of the biggest estate planning questions we hear is: What’s the best way to pass my house on to my loved ones?

While it may seem as simple as naming someone in your will, the reality can be far more complex. Without proper planning, your heirs might face probate delays, unexpected taxes, or even be forced to sell the home.

Understanding your options can help you choose a strategy that fits your goals, protects your beneficiaries, and makes the transfer as smooth as possible.

Key Considerations Before You Transfer Your Home

The best way to pass on your home depends on a variety of factors, including:

• Can your heirs afford future property taxes and upkeep?
• Is avoiding probate a priority for your family?
• Will estate or capital gains taxes affect the transfer?
• Are you concerned about Medicaid estate recovery?

Each of these factors can influence which method is best for your unique situation.

1. Leaving the Home in a Will

This is the most common and straightforward approach. However, property passed through a will must go through probate, which can take months or even years and may involve legal fees.

Pros:

• Simple to create
• Legally recognized

Cons:

• Probate delays
• Public record
• Possible court and attorney fees

If you want your heirs to receive your home more quickly, you may want to consider other options.

2. Using a Revocable Living Trust

Placing your home in a revocable living trust allows you to retain control during your lifetime while avoiding probate upon your death.

Benefits:

• Skips probate entirely
• Keeps your affairs private
• Allows flexibility to change beneficiaries
• Can reduce family conflict by clearly stating your wishes

A trust is a great option if you want a smoother, private, and customizable transfer process.

3. Transferring the Home with a Life Estate Deed

This tool allows you to live in your home for life while naming someone to inherit it after your passing.

Pros:

• Avoids probate
• Guarantees inheritance without delays

Cons:

• Cannot be revoked or changed without the beneficiary’s consent
• Limits flexibility for future planning or selling

This can work well for those who want certainty and are confident about their choice of heir.

4. Gifting the Home During Your Lifetime

Some people choose to transfer ownership while still alive. While it may seem like a generous and proactive move, it comes with major drawbacks.

Risks:

• The recipient may face large capital gains taxes if they sell the home later, since it won’t receive a “step-up” in cost basis
• May impact your Medicaid eligibility if you need long-term care within five years of the gift

We recommend discussing this option with a qualified estate planning attorney before moving forward.

Choosing the Best Path for Your Family

There’s no universal solution when it comes to passing on a home. The right approach depends on:

• Your financial situation and goals
• Your heirs' needs and financial capability
• Potential tax and Medicaid issues
• Whether you want the transfer to be private and avoid court

Key Takeaways

• Wills are simple but involve probate: Expect delays and legal processes.
• Trusts offer control and privacy: Heirs can receive the property faster and with fewer complications.
• Life estate deeds provide certainty: They lock in your wishes but reduce flexibility.
• Gifting may seem helpful but comes with tax risks: It can cost your heirs more in the long run.

At the Werner Law Firm, we know how important it is to make thoughtful decisions about your home. Our experienced probate attorneys in Los Angeles help families like yours create estate plans that protect their legacy and simplify the path for future generations.

If you have any questions, schedule a free appointment with us through our online appointment page.

You can also read reviews from some of the hundreds of clients we have helped over the years.

Reference: Fidelity (Aug. 30, 2022) “Leaving your house to your loved ones”