Leaving real estate to your children while preventing them from selling it requires careful legal structuring. This isn't just about control it's about preserving wealth across generations and protecting assets from impulsive decisions, creditors, or divorces.
There are so many ways through which you can achieve this and I'll be highlighting a few in this piece.
The most effective vehicle is establishing an irrevocable trust with yourself as the grantor and a trustee you appoint to manage the properties. You transfer your real estate into this trust during your lifetime or upon death. The trust document explicitly states that beneficiaries (your children) cannot sell, mortgage, or transfer the properties. They receive only the income generated: rental payments, lease revenues, or other cash flow. The trustee handles all management decisions, maintenance, and distributions according to your instructions.
Dynasty trusts take this further by extending these restrictions across multiple generations. Potentially indefinitely in some states. You can specify that neither your children, grandchildren, nor great-grandchildren can sell the properties, ensuring the real estate remains in the family as an income-producing legacy. These trusts can last 90 years to forever, depending on your state's laws.
Consider creating specific use restrictions. For example, you might allow children to live in a property rent-free but prohibit selling it. Or permit selling only if all beneficiaries unanimously agree and the proceeds must be reinvested in replacement real estate within the trust structure.
It's important to note that this isn't a DIY project. Work with an experienced estate planning attorney in your state who understands real estate law, trust administration, and tax implications. Laws vary significantly by jurisdiction, and poor drafting can create unintended consequences or legal challenges.
Your goal is creating a structure that provides for your children and their children's children while protecting them from themselves and preserving your life's work for generations to come.
