Q: This concerns leaving our home to a relative. My wife and I have a revocable trust and our home will be part of our distributed assets. In order to simplify the executor's task, can we designate the house and belongings to a single beneficiary rather than selling the property? The home is paid for, but would it be prudent to discuss this action with the beneficiary in question? Thank you. --Rob, Elk Grove, CA
A: Yes, your trust may state that your residence passes to a specific beneficiary (or multiple beneficiaries, if you wanted), rather than requiring the trustee to sell the house and distribute the proceeds.
Your trust may also leave it up to the trustee to decide whether to give the beneficiary the house itself, or sell the house and give the beneficiary the net sales proceeds. This might be a good option if you aren't sure whether the beneficiary will want to keep the house, since it gives the trustee flexibility based on the circumstances.
If you want to leave this beneficiary a certain portion, or share, of your estate, you may wish to give the beneficiary an option to have his or her share satisfied with the house.
Keep in mind that the value of your residence, as with any specific gift, may change over time. If you do intend to give this beneficiary a certain portion of your estate that is equal to the value of your residence now, they may end up getting more or less than you expected since asset values shift over time. This is the type of thing you should review regularly as part of determining whether updates are needed to your estate plan.
The specific gift of the residence should be drafted to say what happens in the event that you later borrow against or sell the home.
You could discuss this with the beneficiary and ask his or her opinion. However, one cautionary note about this--if you change your mind later on and leave the house to someone else, conflict or litigation could arise based on your comments to the beneficiary.
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