A client sat in my Manhattan office last week, wrestling with a decision that many parents face. He had three adult children. One, his daughter, had remained in New York, caring for him in his later years. His two sons had moved away decades ago. He wanted to leave her the family’s Brooklyn brownstone—a home filled with generational history—but he was deeply concerned that the act would fracture the relationships between his children after he was gone.
This is one of the most emotionally charged decisions in estate planning. The family home is more than an asset; it is a symbol. When one child is chosen to inherit it, the others can feel overlooked, regardless of the parent’s intentions. My role in these situations is not just to draft documents, but to help clients structure their legacy in a way that is clear, deliberate, and less likely to end in a family dispute before a Surrogate’s Court judge.
The Inevitable Challenge: Sibling Disputes and Will Contests
When a will designates the family home to a single child, the other siblings often feel it’s a statement about their worth or their place in the family. While some families can navigate this with open communication, many cannot. Hurt feelings can escalate into legal action, specifically a will contest.
In a will contest, a sibling might allege that the parent was under “undue influence” from the child who inherited the house. They may claim the parent lacked the mental capacity to make such a decision, or that the will itself was improperly executed. These are difficult, expensive, and emotionally draining battles that play out in public court filings and can permanently destroy what remains of a family.
Some clients ask about including an “in terrorem” or “no-contest” clause in their will. This is a provision stating that if a beneficiary challenges the will and loses, they forfeit their inheritance entirely. While this sounds like a powerful tool, New York law—specifically Estates, Powers and Trusts Law (EPTL) §3-3.5—limits its power. A beneficiary can conduct preliminary examinations of the will’s witnesses and the person who drafted it under SCPA §1404 without triggering the no-contest clause. This often gives a dissatisfied heir enough room to find grounds for a full contest, making the clause less of a deterrent than many hope.
Structuring the Inheritance with Intention
Simply naming one child in the will is rarely the most prudent path. An intentional approach involves using legal structures that acknowledge both the contribution of the caregiver child and the inheritance rights of the others. Stewardship is about planning for these contingencies.
Here are a few structures we often consider:
- Creating a Life Estate: You can grant the caregiver child a “life estate,” giving them the legal right to live in the home for the rest of their life. Upon their passing, the house is sold, with the proceeds divided among all of your children as you specified. This rewards the caregiver with security without completely disinheriting the others.
- Using a Trust: A Revocable Living Trust can provide far more detailed instructions than a will. We can draft the trust to give the inheriting child the right of first refusal to buy the home from the trust at fair market value. The funds from that purchase would then be distributed among all the siblings. If the child cannot or does not wish to buy the home, the trustee is instructed to sell it and divide the proceeds.
- Equalizing the Estate with Other Assets: If the house represents the bulk of your estate’s value, leaving it to one child creates a significant imbalance. However, if you have other assets—life insurance policies, investment accounts, or retirement funds—we can structure your beneficiary designations to direct those funds to the other children. The goal is to make the total value each child receives feel more equitable, even if the assets themselves are different.
The Practical Burdens of Inheriting a Home
Receiving a home is not a simple gift; it is the transfer of a significant financial responsibility. The child who inherits must be prepared for the carrying costs: property taxes, insurance, utilities, and the constant expense of maintenance and repairs. If the home has a low tax basis from when you purchased it, the child may also face a substantial capital gains tax liability when they eventually sell it.
Part of our planning process involves a frank discussion about these realities. Is the inheriting child financially prepared for this? Does it make more sense to direct that the home be sold so the child receives liquid assets they can use for their own needs, free from the burden of a property they may not be able to afford?
A deliberate plan addresses these questions head-on. It ensures that your legacy is a source of support for your children, not a source of conflict or financial distress.
If you are considering how to pass on your family home, the critical first step is to analyze the full picture of your assets and your family dynamics. We recommend you begin by outlining your goals for each of your children and scheduling a legacy review to explore the legal structures that can best help you achieve them.
