By: Cristina N. Hyde, JD
As a rule, all adults should have a written plan in place that clearly defines their wishes regarding the distribution of their property. This plan, known as an estate plan, is meant to provide clear instructions regarding the distribution of wealth in the event an individual is involved in a tragedy that leads to incapacitation or death. That plan should then be updated every couple of years to account for gradual changes in circumstances and soon after life-changing events.
One common life-changing event that should trigger a conversation with an estate planning attorney is the purchase of a new home. Properly incorporating a purchase of real property into your estate plan ensures that your intentions for wealth distribution remain intact and can avoid costly hassles and confusion down the road. For example, individuals who have opted to avoid probate using a trust, must ensure that their new home becomes a part of that trust. Others may want to account for the change in circumstances by reconsidering beneficiaries, guardians, executors, and specific gifts since the new acquisition will be incorporated into the terms of their existing will.
In addition, states have their own specific rules governing property. Keeping your estate plan updated when your assets change, ensures compliance with the unique laws of the state in which the property was purchased. Failing to ensure compliance could cause confusion that may blur your intentions and possibly even lead to the revocation of your entire estate plan. This would then leave your assets and your loved ones to grapple with the lengthy, unpleasant process of intestate succession (e.g., the distribution of wealth as if an estate plan had never existed.)
If you would like to learn more about how to align the purchase of your new home with your current estate plan, contact us.