Alfano Law Office, PLLC

Alfano Law Office, PLLC
Phone: (603) 856-8411 • Fax (603) 290-5521
4 Park Street, Concord, NH 03301
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Home » Blog » An Estate Plan is Necessary Even If You Have a Mortgage

An Estate Plan is Necessary Even If You Have a Mortgage

Too many people seem to think that since they have a mortgage on their home, they do not need to go through the hassle of creating an estate plan. After all, that seems to be the easiest way, because it doesn’t take any time. However, there are numerous reasons why not having an estate plan is a bad idea. Having a mortgage on a home or piece of property isn’t going to make those reasons magically disappear. 

What is an Estate Plan? 

First, let’s take a look at what an estate plan really is. When we talk about estate planning, we are referring to any of the following: 

  • Wills 
  • Powers of Attorney
  • Revocable Trusts
  • Special Needs Trusts

All of these things will help your family avoid probate while minimizing estate taxes. Of course, estate planning will also ensure the proper distribution of assets and even asset protection. 

Reasons Why an Estate Plan is Necessary Even if You Have a Mortgage

Now, it is time to discuss why you must create an estate plan, even if you have a mortgage. 

First, with an estate plan, your family’s finances will never be frozen due to the mandatory probate process. Imagine your family members wanting to pay for your services upon your death and needing to use their own money because they could not access your accounts. 

Of course, an estate plan can also be helpful during your later years when you are unable to take care of your finances on your own. You can appoint a family member, or another person, to not only manage your finances but ensure you are taken care of. Your estate plan can even include specific details of how you want everything done. 

You may think that your family can simply divide your assets amongst themselves after your death. However, without an estate plan in place, New Hampshire law will determine who receives which assets. Your family members won’t get a say. If you didn’t go through the estate planning process, your summer cottage, jewelry, or massive tool collection won’t go to the people you wanted. 

We recommend at least creating a revocable trust to protect you and your heirs. This type of trust will ensure you still have access to your property and money throughout your lifetime. This trust also lists which heirs receive specific assets upon your death. It isn’t difficult to make changes to a revocable trust, so if your situation changes, you will always have options. 

The Biggest Mistake People Make When Creating an Estate Plan

Our law firm likes to make sure our clients are creating an estate plan that will benefit them and their heirs. One of the biggest mistakes we see people make is thinking they cannot include their home within their revocable trust, because they have a mortgage. 

This is not true. You can still place your home within the trust without worrying about what is called a “due on sale” clause. There is a federal regulation in place that exempts this clause when a homeowner places their home in a revocable trust. 

Don’t fall into the trap of thinking that your home and assets are covered without an estate plan simply because you have a mortgage on your home. If you have any questions about estate planning or need to create an estate plan, please contact our office today to schedule a consultation.

Filed Under: Estate Planning

The above information is for informational purposes only and does not constitute legal advice.

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