Client Question: I want to leave my house to my grandchild, do I have to leave it to my kids first?
It's always wise to think ahead about how you want your estate settled upon your death. Planning now can save your loved ones time, stress, and potential legal complications later.
We generally counsel that you and your family discuss your wishes prior to planning your estate, so that your heirs are aware of your wishes. However, we are also aware that some families are… complicated. While it is not necessary to convey your wishes to your family before you die, it may help alleviate any confusion and dispute when you pass.
To leave your house to your grandchild without it going to your children, you have a few options under Texas law:
1. Create a Trust
Setting up a trust allows you to specify that your grandchild will inherit the house. There are many types of trusts available, and consulting with an attorney will help you choose the correct trust vehicle to meet your needs. This method can avoid probate and ensure your grandchild receives the property directly. A great thing about a trust is that it allows you to place all your property into the trust to avoid probate.
2. Transfer on Death Deed (TODD)
A Transfer on Death Deed allows you to name your grandchild as the beneficiary of the house. This deed avoids probate and ensures the property is transferred directly to your grandchild at the moment of your death. A great benefit of a TODD is that title doesn’t transfer until your death which means you can sale and obtain a mortgage on the property or revoke the TODD before you die.
3. Last Will and Testament
You can specify in your will that the house should go directly to your grandchild. However, this method requires probate, which can be more time-consuming and costly.
Considerations
Tax Implications: Transferring property can have tax implications. Consult with a tax professional to understand these implications and plan accordingly.
Communication: It's important to make your intentions known to all potential heirs to prevent misunderstandings and disputes.
For personalized advice and to ensure everything is set up correctly, contact our office today.