My children received a lump sum payment from their father upon his death. I invested it in my home, and am also paying double on the principle each month to pay the house off sooner. I calculated that the amount I save in interest payments will allow me to more than double their investment in 15 years (that is, the savings on interest payments will go back to them, along with their initial investment, when I sell or refinance the paid-off house in 15 years). However, I need to figure out how to transfer this money back to them at that point. It wouldn't technically be a gift because it was their investment money to begin with. But would they have to pay capital gains (although they are not on the title of the home)? In sum, what is the exit strategy that I should use for them to give them back their initial investment plus the return in 15 years?
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