A home is one of the most valuable assets many parents will eventually leave behind. It may also carry decades of memories, making it a particularly personal inheritance. But passing down a house isn’t always as simple as handing over the keys.Even a mortgage-free home comes with ongoing expenses, from property taxes and insurance to maintenance and repairs. And when multiple children inherit a property, questions about whether to keep, sell or live in the home can make matters even more complicated.And you’re not alone in facing these decisions. As the Great Wealth Transfer unfolds, baby boomers are expected to pass trillions of dollars in wealth to younger generations, and homes will be a significant part of that inheritance. A record 340,000 U.S. homes were passed down through inheritance between August 2024 and August 2025, according to Cotality. If your home is likely to be part of that transfer, it’s worth deciding what you want that inheritance to look like before your children are the ones left to figure it out.Have you asked your children what they want? The first conversation your children have about what to do with the family home shouldn’t happen after you’re gone. Talking about your plans now gives everyone an opportunity to be candid about what they would realistically want to do with the property and gives you time to adjust your estate plan if their expectations differ from yours.I can tell you to have this conversation, but I know actually sitting down and having it is another matter. And our research suggests many families feel the same way. In a new survey conducted by Morning Consult on behalf of Kiplinger for our Trillion Dollar Talk campaign, both parents and adult children ranked inheritance among the most uncomfortable family topics to discuss, second to sex and dating.Yet when forced to choose between the two uncomfortable conversations, 71% of adult children said they’d rather talk with their parents about what they’ll inherit than discuss sex and dating. Parents felt similarly: 79% said they’d rather discuss what their children will inherit.Both parents and adult children ranked inheritance among the most uncomfortable family topics to discussSo, while inheritance may not be an easy conversation, your children may be more willing to have it than you think. You don’t need to settle your entire estate plan in one sitting. Start with practical questions about the house. Would anyone actually live there? Would they prefer to sell it? If more than one child is involved, do they have different ideas about what should happen? These conversations may also uncover financial concerns you hadn’t considered, such as whether someone could afford the ongoing costs of keeping the home.And don’t assume one conversation settles the matter permanently. A move, marriage, divorce, major renovation or change in finances can alter what’s practical for you or your children. Revisit the plan periodically so that what you’ve put on paper continues to reflect what you and your family actually want. Once you’ve opened the conversation, these are the questions worth working through together.1. Do your children actually want the house?You may love your home and everything it represents, but that doesn’t necessarily mean your children will want to keep it. Before making the house a central part of your estate plan, ask your children what they would realistically want to do with it.Consider where they live and what their lives might look like when they inherit the property. A child who owns a home across the country may have little interest in moving back, while another may not want the financial responsibility of maintaining a second property. Even if they don’t plan to live there, they could face decisions about whether to rent it, maintain it as a vacation home or sell it. The longer those decisions drag on, the more likely the property is to become a financial burden or fall into disrepair.(Image credit: Getty Images)In my years as a real estate agent, I worked with families who struggled to decide what to do with a home after someone passed away. The property held so many memories that selling it felt painful, but no one wanted to live there. Meanwhile, the bills kept coming and the house continued to deteriorate. The truth about what makes sense for a family home can hurt, but indecision has a cost, too. Wait too long, and you may find that time, money or the condition of the property has made the decision for you.Sentimental attachment can also vary from one family member to another. You may see the house as an important part of your family’s history, while your children may prefer to inherit assets that are easier to manage or divide. Having that conversation now gives everyone a chance to share their expectations and can help you avoid making plans based on assumptions.2. Can they afford to keep it?Even if your children want the house, the next question is whether they can realistically afford to keep it. A mortgage-free home isn’t a free home. Property taxes, homeowners insurance, utilities, HOA fees, routine maintenance and major repairs can add up to thousands of dollars each year.This is something I’ve thought about with my own home. It’s the “big house” where our family gathers, and that makes it important to me. But my children aren’t established yet, and the things that make the house great for a large family gathering could make it too much for one person or a small family to maintain. Leaving someone a valuable asset doesn’t necessarily mean you’re leaving them something they can comfortably afford.That matters even more when the home represents a large share of what you’re leaving behind. Kiplinger’s Trillion Dollar Talk survey found that 33% of parents said real estate, including their home, would make up the greatest share of their children’s inheritance. (Image credit: Getty Images)For children who aren’t yet financially established, an inheritance could have a big impact on their personal finances. The value tied up in a home could help them buy a home of their own, pay down debt, invest or build long-term financial security. But realizing that value requires a plan. Without one, heirs could instead find themselves responsible for a valuable property they can’t afford to maintain or can’t agree on what to do with.If you still have a mortgage, that adds another consideration. Your children may inherit the home, but the debt doesn’t simply disappear. Talk through what keeping the house would cost, whether anyone could comfortably take on those expenses and what would happen if they couldn’t. In some cases, selling a beloved family home may ultimately make more financial sense than struggling to keep it.3. What happens if one child wants the home and another wants the money?Leaving a home to multiple children can turn what seems like a straightforward inheritance into a complicated financial decision. One child may want to keep the family home, while another would rather sell and receive their share of the proceeds.If one heir wants the property, consider whether they could realistically afford to buy out their siblings without putting themselves under financial strain.For many parents, dividing an estate equally is the goal. Kiplinger and Morning Consult’s Trillion Dollar Talk survey found that 71% of parents with more than one child intend to divide their assets equally among them. But an equal inheritance doesn’t necessarily require dividing every asset into equal pieces. Parents can look at their other assets when deciding how to accomplish that. (Image credit: Getty Images)For example, one child might inherit the home while another receives a larger share of savings, investments or life insurance proceeds. What’s equal on paper may not always be what’s most practical for your children, so think about both the value you’re leaving each child and what inheriting each asset would actually mean for them.For my family, I’ve decided I don’t want my children to have to wrestle with what to do with our home or risk having the house become a source of disagreement. Our plan is for the home to be sold and the proceeds divided among them. The house has been where our family built memories together, but I’d rather its value help my children build dreams of their own.Do your children understand the potential tax consequences?Inheriting a home can come with tax implications, particularly if your children eventually sell it. Under current federal tax law, inherited property generally receives a “step-up” in cost basis to its fair market value as of the owner’s date of death. That can significantly reduce the capital gains taxes an heir might otherwise owe compared with receiving the home as a gift during the parent’s lifetime.For example, if you bought your home for $150,000 and it’s worth $500,000 when your children inherit it, their cost basis would generally be stepped up to $500,000. If they soon sold it for about that amount, there might be little or no taxable capital gain. If they kept the house and later sold it for $600,000, however, the increase in value after they inherited it could potentially be taxable.(Image credit: Getty Images)Federal taxes aren’t the only consideration, and the rules can vary depending on how the property is transferred, when it’s sold and where you live. Before deciding how to pass down a home, consider talking with an estate-planning attorney or tax professional who can explain how your plan could affect both your estate and your heirs.Whatever you decide, make sure your estate documents can actually carry out those wishes. An estate-planning attorney can help you determine the best way to transfer the property or direct its sale under the laws in your state. Make sure the house fits their future As I get older, I’m starting to see my children in a different light. They’re building lives and growing in directions I couldn’t have predicted when they were younger. I want the inheritance I leave them to support that growth, not limit the choices they have about what comes next.For my family, that means planning for our home to eventually be sold and the proceeds divided. But what’s right for my family may not be right for yours. Keeping a beloved home in the family could be exactly what your children want, and it could become a place where another generation builds memories of its own.The important thing is not to assume. Talk with your children about what the home means to them, what they would realistically want to do with it and whether they could afford the responsibilities that come with keeping it. Then make sure your estate plan reflects those conversations.A family home can be an incredible legacy. Just make sure the legacy you’re planning is one your children actually want.More Trillion Dollar TalkWhat to Do With an Inherited HouseManage an Inheritance Like a Pro in Just 7 StepsWhat Happens With Taxes When You Inherit a House
Before You Leave Your Home to Your Children, Ask These Questions
