I Have Two Homes, But Three Kids. Can My Estate Plan Be Fair?
We ask estate planning attorneys for guidance.


Question: I own two homes, but have three kids. How can my estate plan split the properties fairly?
Answer: First off, kudos to you for asking this question; it shows that you have started to think carefully about how to pass down your legacy. Many people put off estate planning longer than they probably should. Not only can it produce uncomfortable feelings, but it can also cause stress when you have multiple beneficiaries to consider.
Like many challenging life tasks, the best approach is generally to break them down into manageable pieces and get professional help, if need be. That's why we've asked estate planning attorneys for advice on your question.

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How to approach splitting homes in an estate plan
People like you with multiple children tend to go out of their way in the course of estate planning to make things fair. That way, there’s no animosity between siblings, and there are no ill feelings toward the parents who raised them and are trying to leave a legacy behind.
However, certain assets are easier to split equally among children than others. A bank account with $150,000 can be divided into three $50,000 portions without complication. Things get trickier when there’s a property, or multiple properties, involved.
If you have three kids and own a house, you can’t exactly leave your kitchen and living room to one child, your master bedroom and two bathrooms to another child, and your remaining bedroom, study, and dining room to a third — even if you’re splitting your square footage equally. So if you own two properties and have three kids, it’s important to know how to divide things fairly in your estate plan.
Focus on the value — not the assets themselves
If you owned three properties and had three children, it would perhaps be easier to map out your estate plan. You’d simply leave each child a property.
But that’s not necessarily a fair way to do things, since different properties are likely to have different values. In this scenario, it generally does not make sense to acquire a third property for that purpose.
Instead, it pays to treat your two properties as a collective asset worth however much their combined value is, and split that equally, says Theresa Viera, an attorney who’s the founder of Modern Legal.
As she explains, when there are more children than properties, you could sell both homes and split the cash among your heirs. But you may not want to do that in your lifetime. Instead, she suggests placing both homes into a trust with equal beneficial shares. From there, she explains, your children will have options.
“The property could be sold and the proceeds split, or one child might buy out the other's share at a fair market value,” she says.
There’s also the option to keep both homes if it makes sense financially or for sentimental reasons.
“If the children have strong communication and a stable relationship, children may co-own the home with an agreement on usage and upkeep,” Viera insists. However, she cautions that an arrangement like this could introduce other issues down the line. What if one child takes a job far from the inherited home, for example?
Focus on your children's immediate needs
Another mistake that often arises in the course of estate planning is making inheritance decisions based on children’s current financial situations.
Joseph Fresard, an attorney at Simasko Law, says, “One really common mistake we see is thinking of the home or other assets as needing to go to specific individuals. We often see the thought process that ‘we’ll leave the home to our son because he needs a place to stay, and the rest to our daughter.’ This is often unfair to start, as those assets probably have very different values.”
This thought process also hinges on assumptions that may only be true temporarily. For example, if you have two homes and three children, but one of them is a homeowner at present and the other two are still saving to buy, you may be inclined to leave the homes to your two kids who still rent.
But you don’t know how any of your kids’ financial situations will change over time. It’s not necessarily fair to deny the one child who’s already a homeowner a share of your two properties for that reason alone.
All told, Fresard agrees with Viera that placing both homes into a trust with the three children as equal beneficiaries is the cleanest and easiest way to proceed, assuming your goal is to split your assets evenly. However, that may not be the case.
Say your two properties are a primary home and a vacation home, and one of your children has spent the past couple of decades helping you maintain that vacation property while the others never lifted a finger. You may be inclined to leave that home to the child who constantly stepped up. And if so, that’s a decision it pays to discuss with your children openly, so there are no ill feelings or questions after the fact.
One thing Fresard says not to do, though, is put multiple children on a lady bird or enhanced life estate deed to inherit a home, as there can be many complications with this approach.
“Usually, a trust is the way to go to make sure you are fair to all the kids and they will have an easy time inheriting everything,” he says.
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Maurie Backman is a freelance contributor to Kiplinger. She has over a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. She has written for USA Today, U.S. News & World Report, and Bankrate. She studied creative writing and finance at Binghamton University and merged the two disciplines to help empower consumers to make smart financial planning decisions.
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