For many people planning their estates, their homes will be the asset worth the most money. Family members can easily fall into conflict related to real estate in someone’s estate plan.
Sometimes, especially if you want to leave the house to all of your children, there can be disagreements among your heirs about your property. One of your children may want to keep the house, while the rest of them want to sell it.
Could offering the first right of refusal to one or all of your children help you prevent estate conflicts over your house?
How does the first right of refusal work?
When you extend the first right of refusal to someone in a contract or will, that person has the opportunity to purchase the asset in question before anyone else. In a scenario where your three children will jointly inherit the house, the first right of refusal would mean that one of them could make a fair market offer for the purchase of the property before the other siblings choose to list the home for sale.
It is important to understand that the family members hoping to obtain the house will have to pay an amount similar to what other buyers would offer for the property. The beneficiaries of your estate can choose to purchase the property for what it is worth so that everyone can split the proceeds of the purchase, or they can allow for the sale of the property on the open market.
Getting creative in how you structure your estate plan can help you address the unique concerns that affect your property and your family.