People often use certain life milestones as indicators that it may be time to establish or review an estate plan. For many people, getting married or having children may be the personal changes that make them address their mortality. However, financial goals can also make estate planning a smart step. Those who have recently become homeowners are among those who may benefit from establishing a thorough estate plan.
Why might new homeowners need to think about wills and other estate planning documents?
There is something for beneficiaries to fight over now
Many people can justify delaying the creation of an estate plan because they don’t have much property in their names. Therefore, they have little reason to worry about their loved ones ending up embroiled in conflict over who inherits what property from their estate.
The acquisition of real property changes that. Family members may fight over who should inherit the house and what that means for other assets. The homeowner may have specific intentions regarding who should inherit their home equity or have the option of living in the house.
Medical emergencies are a legitimate concern
Those who have invested in becoming homeowners may have set aside thousands of dollars as a down payment. They may spend years accruing equity through monthly mortgage payments. All of that work can end up in danger if the homeowner has a personal medical emergency.
Estate plans are not just about the descent of assets. They are also about protecting people in unusual circumstances. An estate plan can include financial powers of attorney that protect people during incapacitation.
The homeowner can name a trusted person to access their bank account and cover their financial obligations if they become incapable of doing so. Otherwise, they may end up in a coma after a car crash and risk the loss of their home because they are incapable of paying their bills temporarily.
A home is an asset worth protecting
Home equity is often an individual’s most valuable personal resource, and it may provide the foundation for a long-term legacy. Unfortunately, it is also likely vulnerable to creditor claims and even Medicaid recovery efforts after the homeowner dies. Proper estate planning can help protect key assets, including a primary residence, so that people can preserve their most valuable resources for their loved ones.
Realizing that buying a home makes estate planning necessary can help people protect themselves, their loved ones and their finances. A home can be an important part of a legacy when someone dies and can become vulnerable if they experience an emergency without an estate plan in place.
