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Questions to Ask a Financial Advisor When Buying a House

Purchasing a home is a big decision and can have an impact on your Estate Plan. Keep reading to learn what questions you should be asking your financial advisor.

So, you are considering buying a home. Congratulations! Purchasing a home is a huge decision and an incredibly exciting time in your life. When you buy a home, you will also want to start thinking about how your home factors into your assets and your overall Estate Plan. Since homes are such large purchases, they usually count for a significant portion of your assets as well. You will want to make sure that you have your home protected and that you have a plan in place for who should inherit your home. One person you will want to have this conversation with is your financial advisor. 

Trust & Will, a leader in online estate planning services, knows how intimidating buying a home can seem as you begin to think of the many responsibilities of taking care of and protecting your home. It can be hard to know what the right questions are to ask to make sure that you are taking the necessary precautions. We at Trust & Will want to help make this process as easy as possible. That is why we have put together this article to go over the questions you will want to ask your financial advisor when buying a home and why they are important. 

Keep reading to learn more about the following questions:

  • Should I put my home in a Will or a Trust?

  • What mortgage is right for me and how will this affect my Estate Plan?

  • What insurance do I need to purchase for my home?

Should I put my home in a Will or a Trust?

Before deciding if a Will or a Trust is best for you, it is important to understand what a Will and a Trust are.

What is a Will?

A Will is a legal document that allows you to determine who you want to inherit each of your assets. This can be anything from cars to property, houses, vacations homes, and more. Within your Will, you will be able to name different loved ones in your life as the new owners of your assets. These people will be known as your Beneficiaries within your Will.

What is a Trust?

A Trust is a part of your Estate Plan that allows you to pass on the ownership of your assets to another. In this situation, you are giving the legal responsibility of your assets to a trusted individual, who will be known as your Trustee. Your Trustee will then be responsible for your assets until you pass away, at which point your assets will be given to your chosen Beneficiary, passing on to their new owner. Within a Trust, you are also able to name yourself as the Trustee, meaning you will be able to keep full ownership of your assets until you pass away. 

Now, how do you know whether it will be more beneficial for you to put your home into a Will or a Trust to eventually pass it on to your loved ones? This is a question that you will want to bring up with your financial advisor, as the answers will vary from person to person because everyone’s situation is different. 

However, one of the main factors that you will want to consider when making this choice is the amount your home costs, as well as the value of your assets. Typically, for someone who is purchasing a home that is $160,000 or more, or whose total sum of their assets is $160,000, a Trust is the right option. This is due to the fact that it can be costly to create a Trust. However, one of the main benefits of a Trust is that if you have assets equaling to $160,000 or more, it can save your loved ones money in the long run since you will be able to skip the probate court process.

What mortgage is right for me and how will this affect my Estate Plan? 

When you purchase a home, it is more than likely that you will also need to take out a mortgage to make the purchase feasible for you. To make sure that you are selecting the mortgage that is best for you, it will be important to speak with your financial advisor. Additionally, you will want to ask your advisor about how this could then affect your Estate Plan. 

Generally, if you die and there is a remaining mortgage, that mortgage does not go away. This means that if you choose to leave your house to one of your loved ones, they will also be inheriting your mortgage. Their options will then be to either sell the house to pay off the mortgage, or keep the home and pay off the remaining mortgage. However, if you have sufficient funds in your finances to pay off the mortgage once you pass, this could also be an option. As you may end up passing your mortgage off to your children one day, you will want to make sure you speak to your financial advisor and ensure you are making the best decision for you and your family. 

What insurance do I need to purchase for my home?

When you purchase a home, it is important to make sure you are also purchasing the correct insurance plan for you. By purchasing insurance, you are making sure to protect that home you worked hard to pay for, and to provide to your family. By insuring your home, you will also be protecting your Estate Plan and the assets/inheritance that you intend to leave to your children and loved ones. If your home was damaged in any way and you did not have the proper insurance, you would be responsible for paying for the damage which would decrease the amount of money you have left to leave as inheritance within your Estate Plan. Be sure to protect your home and your children’s inheritance by speaking to your financial advisor about the best insurance plan for you and your needs.

Purchasing a home is a huge decision that requires ample time and consideration. This can often make the process, while exciting, also stressful. However, creating your Estate Plan does not have to be. With Trust & Will’s online estate planning services, it is easier than ever to complete your Estate Plan online. With just the click of a button, you can begin creating your Will or Trust-Based Estate Plan from the comfort of your own home. Get started today! 

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