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Buying a home impacts multiple areas of life including estate planning. This big investment has a significant impact on your financial portfolio, so it's important to cover all the bases. Here's a closer look at what you need to know.

What to Know About Estate Planning When Buying a Home

1. Update Distributions

The goal of estate planning is to make sure your assets are distributed how you want. As such, you need to choose what happens to the property if you pass away. You may choose a single individual to inherit it or split the ownership between multiple people.

You can also request that it's sold and the proceeds divided up. If you have multiple direct descendants, like children, you can give each individual assets that total to approximately the same amount.

estate planning

2. Review Insurance Coverage

Life insurance is essential to protect the financial situation of dependents if they lose your income. After the purchase of a new home, their potential expenses are likely to change.

To prevent a burden, ensure the payout of your current policy has enough excess to cover the full mortgage and a few years of homeowners insurance and property tax. If not, increase the rate.

3. Consider the Options

When a person passes, their assets go into probate. The beneficiaries have to wait to take ownership until the process is complete, which can take months or years. There's also an opportunity for individuals to come forward and make a claim on the property or dispute the will.

To bypass the process, create a trust and transfer the home to it. As the trustee, you can live there and maintain control of it. Since it's legally owned by the trust, it won't go through probate upon your passing. Ownership will be transferred to the beneficiary or sold with the proceeds passed accordingly, which works well with multiple beneficiaries. Alternatively, you can designate a single individual with a transfer on death deed.



If you've recently bought a home, get your affairs in order by working with Hawaii Convey in Honolulu. These attorneys will offer sound counsel throughout the estate planning process to ensure each asset is accounted for and distributed according to your wishes. Get more information about their services online, or call (808) 792-8777 to schedule an appointment.

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