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Keeping it in the family: How to leave behind property to loved ones

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Sentimental memories and times spent with those you cherish are what make a house a home. Maybe that's why you want to leave it to someone who understands what makes it special.

Creating an estate strategy to transfer property is the best way to ensure your home—and the rest of your possessions and assets—stays in the hands you choose. Here's what you need to know about passing down property after you die, and planning for it while you're still living.

Make a plan for your property

Your property is an important asset to cover in your estate plan—a set of documents that gives you control over who will receive your belongings and how they'll be distributed.

Estate plans take into account everything you own, which may include properties like:

  • Your primary residence.
  • Your family business or farm.
  • A vacation home or second home.
  • Investment/rental property.

A detailed estate plan also allows you to consider the tax implications for your beneficiaries, help your loved ones avoid probate court (where a judge distributes your assets), and mitigate potential family strains.

Options for transferring property upon death

You can pass down your property through estate planning in a few ways, and it's important to consider the pros and cons of each.


One option is to leave your house to someone in your will. A will names the beneficiary for each item of property and transfers ownership after the probate process. A will can be easy to prepare. You also can include a residuary clause so that if you forget to specifically mention items of property, they're included and distributed.

The drawback to using a will is that it must go through the probate process. This can take up to many months and incur costs and fees before assets are distributed. Everything is a matter of public record. And estate taxes also may apply.


trust is a legal entity in which assets can be transferred from one person (the "grantor") to their heir(s), or "grantee(s)" (i.e., beneficiaries). The trust owns and manages your property while you're alive and then transfers property to your beneficiaries after you die.

If you place your home in a revocable trust, your terms may allow you to continue to live at the property, make improvements to it or even sell it. But the trust technically owns the property, so some extra paperwork is involved. A person you appoint—called a "trustee"—manages the trust assets. If you wish, you can be your own trustee while you're living. Or you may appoint a professional trust service like Thrivent Trust Company to serve as your trustee or personal representative of your will.

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After you die, the trust becomes irrevocable, and the successor trustee distributes the assets according to your wishes. You can create certain stipulations, which is one of the key benefits of a trust versus a will. For example, you can leave your home to your child but require them to be age 30 or get a college degree before they can take ownership. Creating conditions isn't an option with a transfer through a will. Assets in a trust also don't pass through probate and therefore aren't made public—allowing you privacy. One exception to this is a type of trust called a testamentary trust. In this particular arrangement, the trust is established after your will goes to probate, but then receives all the same advantages as any other trust.

The main drawback of trusts is that even if you create the document that sets it up, you have to transfer ownership of the property to the trust for it to be effective. If you forget to do that or don't include certain assets, they have to pass through your will. A trust also can be more expensive than a will and requires additional record-keeping.

Transfer on Death deed

A transfer on death (TOD) deed, or beneficiary deed, automatically transfers ownership of property to a beneficiary upon the owner's death. A TOD deed can be an attractive option as it avoids probate and sidesteps the complexity that can come with creating a trust.

Since you maintain complete ownership until you die, you can do whatever you want with your property: refinance, rent out, renovate or sell. And a TOD deed is revocable, so you can change or revoke your set beneficiary at any time.

TOD deeds aren't valid in all states, so working with a professional can help you comply with your state laws and correctly complete the deed. The deed must be recorded with the county before the owner dies. It isn't valid if it's filed after that date. If your grantee dies before you and you don't change the deed to include a different grantee, the property passes through probate upon your death.

Keep the things you treasure with the people you love
Property is just one important asset you want to end up in the right hands after you pass. Explore strategies for transferring assets to your loved ones.

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Options for transferring property during your lifetime

You don't have to wait until after you've passed to transfer your home or other property. When you're estate planning, a transfer of property during your life can be a key part of your strategy.


Gifting property is a fast and easy way to transfer ownership by deed. It also allows you to see your recipient enjoy that property.

You can gift property to anyone you want. In 2024, any gift over $18,000 (or $36,000 for a married couple) is subject to gift tax, which is included in your lifetime $13.61 million combined gift and estate tax (per individual). And if you transfer your home and then need to qualify for Medicaid, the Medicaid lookback period is five years. If you made the transfer in that time, it may count against you as an asset if you still have access or if no one else is living there.

Important to note: The recipient of your property gets your adjusted basis. So if they ever sell it, they pay capital gains on the entire increase in value—not just from the date of the transfer. In comparison, if the recipient inherits the property after you die, they get the value at the date of death as the cost basis.


You can keep property in the family by selling it to a relative. But IRS rules state that if you sell it for less than its worth, you can't deduct a loss for the property. Detailed rules also apply to the taxes the buyer pays if they ever choose to sell the property. In short, selling your property to a family member can be complex if it isn't a sale made at fair market value.

If you sell the property, the usual real estate taxes, fees and legal documents are involved, just as if the property were sold to a stranger. So, it isn't necessarily a simple process.

Considerations for property transfers

If you're considering transferring property to heirs, talk to your family members about the options and potential impacts. Taxes and fees can be significant. And if the property has a mortgage, its inheritor may need to continue payments and work with the loan servicer on how to assume the loan.

You may decide you want multiple beneficiaries to share ownership of your property once you pass. In that event, you'll have to lay out terms for tenancy in common or joint tenancy. While tenancy in common allows any owner to transfer their share to someone else without the approval of the co-owner(s) and is automatically passed to heirs upon death, joint tenancy ensures shares can't be transferred without all co-owners' consent. If one owner dies within a joint tenancy, their shares are transferred to the surviving co-owner(s).

Individualized guidance can help you plan ahead

If you're considering how to best transfer ownership of your home, consult with an estate planning attorney and financial advisor to understand how each option plays out. Then, you can decide what's right for you and your family.

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Trust and investment management accounts and services offered by Thrivent Trust Company are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, nor guaranteed by Thrivent Trust Company or its affiliates, and are subject to investment risk, including possible loss of the principal amount invested.

Trust and investment management accounts and services offered by Thrivent Trust Company, a subsidiary of Thrivent is the marketing name for Thrivent Financial for Lutherans and an affiliate of Thrivent Investment Management Inc. Neither Thrivent Investment Management Inc., a FINRA and SIPC member, nor its associated person(s) is offering any product hereby. Certain Thrivent Investment Management Inc. associated persons refer prospective clients to Thrivent Trust Company.

Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.