By Libby Banks, the Law Office of Libby Banks, PLLC
With the real estate market a hot topic, I thought I would talk about the importance of having an estate plan if you own a home. If you bought a second home during the pandemic, you probably need a revocable trust – especially if that vacation home is in another state.
Why do you need a plan? First, we must be sure that someone can step in if you are incapacitated. What will happen to your home if you are unable to handle your finances? Who will pay your mortgage, keep the electricity on, and keep things running? Who will sign to sell the home if you need the money from a sale? With a proper estate plan, you appoint the person who will have the power to take care of your home, sell it if needed, and take care of you. Without that, the court appoints someone in a costly proceeding called conservatorship.
Second, what will happen to your home when you die? Without a proper estate plan, it might not go to who you want to have it. If you want your spouse to have your home, let’s plan for that. But what about after your spouse dies? Without an estate plan, if the home and other assets are in both you and your spouse’s names, then all of it passes to the surviving spouse. If you pass away first, your spouse gets to decide who will receive the property when he or she dies. If he or she dies without an estate plan, the law says that the house or the proceeds goes to his or her heirs, whoever that may be – but if you have no common children, your heirs get nothing.
For a single person with more than one child, it is important to have a plan that appoints one person to handle the estate. Without that, all three children have an equal right to serve as personal representative of your estate. If they all agree on who should serve, no problem. But if there is any disagreement, it could cause delays in getting control over your affairs, meaning your mortgage may go unpaid, and the utilities could be shut off before anyone has standing to take over and maintain the home.
An estate plan is a necessity for all homeowners. The Law Office of Libby Banks offers a free consultation to discuss what kind of estate plan is right for you. Call 602-375-6752 or visit libbybanks.com to learn more.