Question on rentals and estate planning

[pedsmd]

My wife and I are in our 40s. My in-laws own a beach house that they rent out seasonally. The house needs a lot of work and potentially just needs to be taken down and rebuilt (a few of their neighbors have done that). The house the 2nd in from the ocean with an amazing view. Because of the condition they're not getting the best price for renting. My in-laws have told us that they are going to leave the house to us in their will.

In an ideal world we'd like to take over the property, fix it up (either renovate or just rebuild), and handle the renting with the eventual goal of retiring to the house (perhaps renting part of it and living in the other). From the little I understand about estate planning it's better for them to fix it up and then give us the house in their will vs. giving it to us now due to the step up in basis. Is that correct? Is there a way for us to go in together on it and then later take it over? I'm not sure how gung ho they are about handling the renovations themselves.

[Tim]

You can run everything for them, lend them money. Get paid back. Transfer on death deed.
You don’t want them to give you the house legally. Inherit it.

[jfoxcpacfp]

Definitely want this to pass through the will. Just “loan” them the money to fix up the property and then get it remodeled likeTim said. Also recommend they have appropriate umbrella coverage. Be sure you make it a legal debt so it will be a liability of the estate, in case you’re not the executor.