Due to recent changes around the country, more and more young people have put in the investment to own a home. In fact, mortgage rates have reached all-time lows at the same time that prices hit record highs and inventories hit record lows.
But many people go into buying their first home without really knowing anything about it. This includes how homeownership ties to estate plans.
Who needs a trust?
Forbes discusses the importance of setting up an estate plan after buying a home. Unfortunately, most people falsely believe that trusts and estate plans only hold a purpose for the wealthy or elderly, i.e. those who have large amounts of assets or wealth.
Those who do not own homes or have less than $150,000 in assets likely do not need a trust, but throwing a home into the mix may change this. Homeowners will want an estate plan specifically for a trust, which will allow the homeowner to ensure a quick and safe transfer of the home to a loved one.
If the homeowner does not place their home in a trust, then it will need to go through the probate process before it ends up in the beneficiary’s possession. On average, this process takes about two years and can cost loved ones money and stress in addition to the time sink.
Those who already have an estate plan should review and rework their plan after the purchase of a home for similar reasons. Adding it will allow beneficiaries to reap immediate and uncomplicated benefits if anything unexpected should happen to the homeowner.