3432: [Part 1] Transferring a Primary Residence to Children by Sean Mullaney of FI Tax Guy on Legacy Decisions

When you're ready to start your business, Northwest's registered agent gives you access to thousands of free guides, tools, and legal forms, everything you need to launch and protect your business in one place. Northwest's registered agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly thirty years. They're the largest registered agent and LLC service in The US, with over 1,500 corporate guides, real people who know your local laws and can help you and your business every step of the way. Plus, with Northwest, privacy is automatic. They never sell your data and handle all services in house because privacy by default is their pledge to customers. Don't wait. Protect your privacy, build your brand, and get your complete business identity in just 10 clicks and ten minutes. Visit northwestregisteredagent.com/ofdfree and start building something amazing. Get more with Northwest Registered Agent at northwestregisteredagent.com/ofdfree. This is Optimal Finance Daily, transferring a primary residence to children, part one, by Sean Mullaney of phitaxguy.com. How do you pass your family's house to your children? It's a pressing question and involves significant tax, legal, and emotional considerations. Unfortunately, it's a topic about which there is much confusion. This blog post discusses some of the important considerations, but as a blog post, it can only scratch the surface. Anyone looking to efficiently pass on their home is well advised to consult with their own lawyer, tax professional, and in some cases, their banker as well. Minor children. To my mind, the primary planning objective of married couples with minor children is to account for what happens if both spouses die. Such couples would want their children taken care of in the most flexible manner possible. Generally speaking, in such situations, it's often best to work with a lawyer to transfer the primary residence to a revocable living trust. In the event of both spouses' deaths, the house would be held by the trust and managed by the trustee of the trust. It could be sold or rented for the benefit of the children or kept so the children and their guardians could live in the house. This resolution is generally preferable to leaving a house directly to minor children. Revocable living trusts. What is a revocable living trust? It's generally a written trust drafted by a lawyer that owns property the grantor's or settlers transfer to the trust. For this sort of planning, usually spouses, the grantor's, transfer their home to the trust and designate themselves as the primary beneficiaries of the trust. The trust provides that the grantor's minor children are the successor beneficiaries. Upon both spouses' deaths, the trust becomes irrevocable and a trustee holds the assets and manages them on behalf of the beneficiaries, the minor children. The best thing about a revocable living trust, as long as the grantors are alive, the trust is fully revocable, so mistakes can be easily fixed, working with a lawyer. Revocable living trusts also generally avoid probate. Tax …