Buying a home is often the largest financial investment a person will make, and it should trigger a review of their estate plan. Here are three important estate planning steps every new homeowner should take:
- Create or Update a Revocable Living Trust
A revocable living trust can help avoid probate, provide privacy, and allow for smoother management of the home if the owner becomes incapacitated or dies. The trust should be properly funded by transferring title to the home into the name of the trust. Without funding, the trust may not accomplish its intended purpose. - Review and Update Beneficiary and Fiduciary Designations
New homeowners should review who is named as:- Personal Representative (Executor)
- Trustee
- Agent under a Power of Attorney
- Health Care Representative
Purchasing a home often changes financial circumstances and responsibilities. It is also a good time to review beneficiary designations on retirement accounts and life insurance to ensure the overall estate plan works together cohesively.
- Sign Durable Powers of Attorney and Health Care Documents
Homeownership creates ongoing financial obligations such as mortgage payments, taxes, insurance, and maintenance. A durable financial power of attorney allows a trusted person to manage these matters if the homeowner becomes incapacitated. Advance directives and health care powers of attorney ensure medical decisions can be made efficiently if needed.
Additional considerations may include:
- Reviewing homeowner’s insurance and liability coverage
- Considering a transfer-on-death deed where appropriate under state law
- Evaluating whether ownership should be individual, joint, or trust ownership
- Updating the estate plan after marriage, children, or major financial changes
In states such as Oregon, trust funding and title coordination are especially important to ensure the home passes according to the homeowner’s wishes while minimizing probate complications.