Home sweet home. our home is not just a building; it holds immense emotional and financial significance. Your home is where your family resides, and you feel secure, connected, and comfortable. For younger people, it represents endless possibilities, whereas, for those in their middle age, it’s full of energy and vibrancy. And for those in their later years, it’s a place of familiar comfort that brings back the memories of the joys of earlier days.
Apart from the emotional significance, your home is also a valuable financial investment that has consistently grown in value over the past several decades with less volatility than the stock market. Moreover, your home has many important attributes that make it a significant asset from a tax, estate planning, and asset protection perspective.
In some states like Florida and Texas, your home is exempt from attachment in a bankruptcy proceeding. In other states, some of the equity in your home can be shielded from creditors. In states recognizing “tenancy-by-the-entirety” ownership between spouses, a creditor of one spouse cannot force a sale of the house to pay off the debt.
Additionally, your home is not considered an available resource when determining eligibility for Medicaid benefits or financial aid needs at most educational institutions. Furthermore, your home can enable you to do advanced estate planning, such as a Qualified Personal Residence Trust or “QPRT.” With a QPRT, you can make a gift of an interest in your home to your children. If your home grows in value faster than the interest rate assumed by the IRS, the additional growth is passed without any tax. During the term of the QPRT, you can continue to live in the home.
Your home is essential for you, both emotionally and financially. Therefore, it’s crucial to consult with a qualified estate planning attorney who can help you make the most of your home during your life and after you are gone. Contact us to schedule your free personal consultation.
Compliments of the McGee Law Firm, Attorney Brandon McGee
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