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Should You Leave Your House to Your Kids?

Before bequeathing your home to your heirs, consider these five key questions

6-minute read

Margaret Heidenry,

AARP

Published October 20, 2026

An older couple holds up a miniature house toward three cheering children below.

Sjoerd van Leeuwen

Key takeaways

Ask your children whether they would live in the home, rent it out or sell it before deciding how to pass it down.
Shared ownership can create disputes over expenses, maintenance and when to sell the property.
Your will, trust documents and the home’s deed should be aligned so that there’s no confusion about who inherits the property after you die.

For many parents, the family home is where they raised their children and built decades of memories. It’s also often their largest financial asset. Passing it on to the next generation may seem like the natural choice, but there are important considerations before bequeathing your home to your kids.

“The biggest misconception is that leaving the house to the kids is automatically a gift,” says James Comblo, partner at Prosperity Capital Advisors in Fishkill, New York. “Sometimes it is,” he says, “but sometimes what the parent sees as a legacy, the children experience as a burden.”

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Taxes, retirement plans, family dynamics, and your children’s own expectations and desires can all shape whether it makes sense to leave your home to your kids. Before deciding what to do, experts recommend considering these five questions.

Will your children live in the house or sell it?

David Handler, a trusts and estates attorney and partner at Kirkland & Ellis in Chicago, says parents often make two faulty assumptions. The first is assuming that their children will want to live in the home after they die. “Usually, they have their own homes and want the sale proceeds,” he says.

Parents also shouldn’t assume that their kids will agree on what to do with the house, “especially if it is a vacation home,” says Handler. “Some may want to keep it, and some may want to sell.”

Shannon McNulty, a trusts, estates and tax attorney at the Village Law Firm in New York City, says parents often overlook what shared ownership will look like when leaving their home to more than one of their offspring. “If it’s one child, I don’t think it’s a problem because that child can sell the property whenever they want,” she says. “If there are multiple children, then I think you really have to think about what your vision is for how that’s going to work.”

Some parents envision their home staying in the family for generations, but McNulty says that’s rarely how things unfold. “In about 90 percent of cases, the property simply gets sold,” she says. “That’s the cleanest outcome.”

Talk with your adult children to find out what they want. Would one of them want to live there, or would they all want to sell it and share the proceeds? Would they want to rent it out and share the profits? Their desires can help inform your estate plan.

If one child wants to inherit the home and the others don’t, Handler says parents can leave the property to that child and give the other children money or other assets of similar value.

Will inheriting the home help your children or create challenges?

Property taxes, insurance, utilities, maintenance and repairs don’t disappear when ownership changes. And siblings may disagree over who is responsible for the bills.

Attorney Melissa Terranova, who practices estate and wealth planning at Fox Rothschild in Princeton, New Jersey, says shared homeownership can create a host of legal complications, such as disputes over maintenance and expenses, disagreements over when to sell, or problems stemming from an heir’s divorce or death.

McNulty has seen another problem arise when siblings inherit a home together. In some states, heirs can request a court order to force the sale of the property. “One child can force a sale,” she says.

Have you thought through the tax consequences?

The way you pass down your home matters too. Parents can leave a home to their children when they die or transfer an ownership interest while they’re alive by adding a child to the deed, the legal document that establishes who owns the property. These options have different tax consequences.

One tax advantage for children who inherit a home upon a parent’s death is something called a step-up in basis. “The step-up in basis is something a lot of families don’t fully understand,” says Deon Strickland, a professor of finance at Wake Forest University.

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When a homeowner dies, the tax basis is typically “stepped up” to the home’s fair market value on the date of their death. If the heir later sells the home, capital gains tax is based on the difference between the sale price and the new stepped-up basis, not the original owner’s purchase price.

McNulty offers an example. Say a parent purchased a home for $200,000 that is now worth $1 million. If they die and their child inherits the home, its value for tax purposes resets to $1 million. If the child then sells it for that amount, they generally wouldn’t owe capital gains tax on the $800,000 the home gained in value during the parent’s lifetime.

In contrast, adding a child to your home’s deed while you’re alive can hinder them financially when you die. That’s because your child likely won’t receive the same step-up in basis, which could lead to a larger capital gains tax bill when they sell the home.

Parents should also think carefully before giving away an ownership interest in a home that they may need to help pay for their own care in the future. A home can serve as “a hedge against a need for long-term care,” says Strickland, because it can potentially be sold to help cover health care bills.

Is your estate plan structured properly?

Choosing who inherits your home is only part of the equation. Your will and trust documents should be aligned with the home’s deed so that there’s no confusion about who inherits the home after you die.

Have you shared your plans with your children?

Many parents never discuss their estate plans with their children or explain the reasoning behind key decisions. But Strickland says having those conversations can help set expectations, head off misunderstandings and prevent family conflicts after you’re gone.

“The issue more likely than any other to cause strife, between you and your children and between the children themselves, is when kids have preconceived notions of what an estate is going to look like and things don’t pan out that way,” he says.

Sometimes the clearest estate plan is also the simplest: Parents who know that their kids don’t want to inherit their home can specify in their estate plan that the house be sold after they die and the proceeds be divided evenly.

Whatever your wishes may be, don’t wait to put a plan in place. As Comblo says, “The worst plan is no plan.”

The key takeaways were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.

Margaret Heidenry is a writer who specializes in real estate. She was previously an editor and writer at Realtor.com. Her work has also appeared in the New York Times Magazine, Vanity Fair and Boston Magazine.

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