It is a well-known fact that 33 percent of people buying houses are first-time homebuyers.
So, you have just bought your first house, or this is an addition to the ones that you already have. Well, many people are so excited when they buy a home that they forget one vital element of life – estate planning.
Studies show that more than half the population of adults in the country hasn’t come up with a will yet. They are still procrastinating on whether a will is ideal or not.
We have a few triggers that will make you decide to update your estate plan, that is if you have one, or to come up with a new one if you don’t have one at all. Purchasing a home is one trigger that you need to work with.
Let us look at a few tips to help you update your estate plan the right way when you buy a home.
Decide on Ownership
You have to decide on how the property needs to be passed on when you die, something that isn’t easy to think about when you have just moved into your new house.
For instance, when you own the house alone, it will be passed on to your relatives as per the state laws or will go to the beneficiaries that you have spelled out in your will.
On the other hand, if you have purchased the house jointly with your wife, then the property goes directly to her. If you own the house with someone that isn’t your relative, then the property is passed down to the person as per your desires.
So, before you go ahead and come up with a way to pass on the property, make sure you consider these aspects, then update your estate plan the right way.
Get a Power of Attorney to Handle Decisions
Having a house is one thing, but managing it when you are incapacitated can be a tough task for you. This is why you need to come up with a document that mentions the person that will make the decisions on your behalf. The document that you come up with is called a power of attorney.
When you have this document set up adequately, it allows you to name someone that you trust to handle your financial decisions when you are ill, and you cannot make decisions as required.
If you don’t have someone in mind to take up this role, then a beneficiary might go to court and take up the part, which will take a lot of time and might result in missed payments on your mortgage.
Update Your Will
A home is a unique part of any estate plan because it doesn’t just represent a property, but a place that you have fond memories about.
For you to transfer the property to someone that won’t cherish these memories is a bad thing – which is why you need to make sure that you pass the property to someone that will love the property.
Without a will, you grant the federal government the right to administer the property on your behalf – meaning the state will determine who gets the house.
You have put a lot of money, love and time into making a house your home, so it is just right that you decide who gets it so that they maintain it the way you want it to be handled.
If you don’t want anyone to have the house, you can recommend the executor to sell it and then share out the proceeds with a few beneficiaries, or all of them.
Choose an Executor
The executor is that person that makes sure the desires of the will are followed to the latter. They make sure they distribute the funds to your beneficiaries the right way and then act on your behalf when you pass away.
You need to choose someone that you trust, someone that will make sure the property gets to the beneficiary as you intend, someone that won’t side with a few beneficiaries to make others feel left out.
After appointing the executor, let them know what you wish and then follow it to the latter. Tell them where you have stored the will so that they have access to it as needed.
When you buy a new house, so many things change, among them the way ownership changes hands. You need to make sure you draft a will to tell your beneficiaries what you have decided. Take time to understand what the law stipulates about the estate plan. Talk to an estate planning lawyer for more information regarding the same.