Retirement often brings big changes, including the purchase of a new home. From downsizing to choosing an active adult community, you have important decisions to make. That new investment should trigger another important step: updating your will.
Why it matters: A new home changes your financial picture. If your will is outdated, your wishes may not be honored, and your family could face costly delays or disputes.
"After purchasing a new home, it's crucial to update your estate plan to ensure that your assets are distributed according to your current wishes," advises Schromen Law LLC. "This includes updating beneficiary designations and establishing a power of attorney to manage your property and finances if you're incapacitated."
Imagine a retiree who remarried and purchased a new home but failed to update her will. When she passed away, her surviving spouse assumed full control, leaving her children unable to access family possessions. This situation, as highlighted in MarketWatch's Moneyist column, is all too common and underscores the importance of regularly updating estate plans.
Why a New Home Means a New Will
Asset changes: A home is often your largest asset. Update your will to reflect the new deed, loan, and location, and remove your old property.
Beneficiaries: Life events may change who should inherit. Be clear on whether your heirs can live in or must sell an age-restricted property.
Avoiding probate: An outdated plan can mean long, expensive court proceedings. A current plan minimizes delays and stress.
Clarity for family: Be explicit about who inherits the home to avoid confusion and protect your legacy.
Legal & Financial Considerations
Will vs. trust: A will works for simple estates. A living trust helps avoid probate, protect privacy, and smooth asset transfers. Many retirees use both.
Joint ownership: Co-ownership can let property transfer directly without probate.
Executor & POA: Choose an executor to carry out your will and a power of attorney to manage finances if you’re incapacitated.
Taxes: A new home affects estate and inheritance taxes. An attorney can guide you on trusts, lifetime gifts, or charitable giving to reduce tax burdens.
Capital gains: Get an appraisal. Plan ahead for how property transfers will affect heirs and their tax obligations.
Practical Tips for Updating Your Will
Ensure your will remains current and aligns with your intentions as a new homeowner.
Review: Reread your current will and note needed updates.
List assets: Identify all your assets including bank accounts, investments, personal belongings, and any other properties you own, ensuring they match the list in your will. Add the new home with its legal details.
Update beneficiaries: Ensure designations reflect current wishes and name guardians if needed.
Get legal help: An estate planning attorney ensures compliance with state laws.
Formalize: Use a codicil (an amendment to original will) or new will, signed and witnessed properly.
Communicate: Share updates with family to avoid surprises and potential misunderstandings.
Review regularly: Update your plan after major life changes. A will is not a static document.
Bottom line: Buying a new home is exciting, but it also makes updating your estate plan essential. A current will protects your assets, prevents legal complications, and ensures your legacy passes the way you intend.
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Julie Gordey
A lifelong educator, Julie Gordey, is a retired school administrator. After years of focusing on education, this University of Texas graduate now travels and enjoys freelance writing for BDX and NewHomeSource.com.