Owning a home symbolizes stability, security, accomplishment, and for many is a major life milestone! It also comes with a set of responsibilities, and that includes estate planning. Estate planning involves preparing for the management and distribution of your assets in the event of death or incapacitation. Now that you own a home, it’s crucial to prepare or update your estate plan to protect your newest asset.
Here are five estate planning considerations to keep in mind after making that big purchase:
- Have a Will or Trust: Establishing a will or trust will allow you to specify how your assets, including your home, will be distributed after your death. This also allows you to name an individual to be in charge of this process. Estate planning can help ensure privacy and efficiency in the distribution process.
- Plan to Avoid Probate. In Minnesota, real estate is subject to probate court without prior planning. There are a number of ways to plan for your home to avoid probate court after your passing, such as using a trust or transfer on death deed. An estate planning attorney can help to identify the most efficient and cost-effective approach for your situation.
- Update Beneficiary Designations: Certain assets, such as retirement accounts and life insurance policies, pass directly to beneficiaries outside of the probate process based on beneficiary designations. After buying a new home, it is important to review and update these designations to ensure they align with your current wishes.
- Establish a Power of Attorney: Estate planning isn’t just about what happens after your death; it also involves preparing for potential incapacity during your lifetime. A power of attorney allows you to name someone to make financial and legal decisions on your behalf if you’re unable to do so yourself. After buying a home, a power of attorney is crucial in order to name a trusted individual to take over management of your property and finances if you’re incapacitated.
- Assess Estate Tax Planning: Depending on the value of your estate and applicable tax laws, your estate may be subject to estate taxes upon your death. Proper estate tax planning can help minimize the tax burden and maximize the amount your heirs receive from your estate. Consult with a qualified estate planning attorney to develop a tax-efficient plan tailored to your situation.
Purchasing a home is a thrilling milestone to be celebrated! It should also prompt a review of your estate plan. Doing so will ensure that your home and other assets are protected and distributed according to your wishes. Make an appointment with Schromen Law, LLC to get this process started soon!
The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Schromen Law, LLC and the reader. The views expressed in this article are not a statement of support or endorsement by Schromen Law, LLC. The information contained herein is not offered as legal or medical advice and should not be construed as legal or medical advice.
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