Estate Planning: An Essential Tool for New Homebuyers and Investors

Estate Planning with New Home

Buying a home or being a new homebuyer is an exciting time. A home can be the most valuable asset in an estate. One important consideration that should be taken care of while you make this big step with your family is to ensure that you take the steps to protect you, your family, and your assets (including your new home) should anything happen to you.

With only a few exceptions, all real property is subjected to probate if you don’t have a will or other estate planning mechanism in place to transfer title from you (your estate) to where you want it to go. If you own your property as tenants in common, you have the right to transfer your percentage ownership of the property to someone else via your Will.

As a new homeowner, you will need to consider and take action on the following:

Create a Will

This is a basic, but important documents that you should have in place. In Florida, a will governs the distribution of the assets owned by the person who dies. Otherwise, the assets are passed or titled to the descendants of the person who dies without regard to what their wishes may be. A will can be used to pass on a home or other real property. This process helps ensure that the owner decides who inherits the property. However, assets that transfer through a will still pass through the probate process, which can be time-consuming and expensive.

Update your Estate Plan

No matter what type of estate plan you already have in place, you will want to check your current estate planning documents to make sure that your new property has been titled properly to meet your estate planning goals. For example, if your current estate plan had a specific direction to give your old property (if you sold one), you will want to make sure that you update your estate plan to remove the old one and add the new property. As another example, if you have a Trust or other probate avoidance estate plan, you will need to make specific changes to the title of your new home into the name of the trust and not in your name individually.

Consider a Life Insurance Update

If you have a new home with a mortgage and children or other family members you care for, securing life insurance can help ensure they are provided for and that outstanding debts get paid. An experienced estate planning professional can help with this.

Title property with Rights of Survivorship: 

If you have a life partner or other non-spouse as co-owner of the home such as a parent or sibling, be sure and title your home with rights of survivorship. This allows the property to transfer directly to them, and vice versa should either of you pass on and avoids the lengthy probate process. Even if you want to leave it as is, be sure to discuss with the co-owner what your wishes are as to what will happen your interest in the property should you die first.

Create a Trust

By placing your home in a special type of trust, older adults can protect their rights to Medicaid benefits, which can help offset future long term care costs. It also allows you to dictate how ownership is eventually transferred and who is entitled to live on the property. By putting the title of the home in a trust, you can be sure that the ownership of the home will avoid the probate process.

If you don't take any action to create an estate plan and die without a will or having made any other arrangements, your assets will pass according to your state intestacy laws, which may or may not reflect your wishes. This may include going through probate—a process that is usually expensive, in public view, slow, and often complicated.

When creating or updating your estate plan, it is important to work with an estate planning attorney to ensure your wishes are written down, as well as protect yourself and your loved ones. It's important to come up with a plan that makes sense for you, and your heirs, and to create an efficient strategy to execute it by working closely with an estate planning attorney that will create a customized estate plan to fit your needs.

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The Deere Law Firm is Here to Help

Buying a new home or an additional property is a big step and we are here to help. Contact the Deere Law Firm today at (561) 515-4376 (by phone or text), and please visit our website www.deere-law.com to learn more about us.