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How estate planning relates to residential real estate purchases

We know when you're buying a new home, you've already got a lot of things on your mind. The last thing you might want to deal with is more paperwork and more decision-making, but there are a few benefits to considering some estate planning matters as you go through with any residential real estate purchase.

First, if you have heirs -- such as children -- that you plan to leave property to should anything happen to you, consider how they might best benefit from the home. Often, people want to leave their heirs with the home, especially if a spouse or minor children are involved. Knowing that you would leave dependents with a stable living situation can bring a lot of peace of mind. If you finance your home, however, you might want to consider how heirs could pay for it should something happen to you. Does your estate have enough liquidity to cover the mortgage? If not, life insurance can be a good option.

Even if you don't have minor children, a house in the mix can add to fighting among heirs if you don't have a plan. How will the home be handled within your estate? Does one heir get the house while others get different assets, or do they all inherit the home together? Do you want one of your heirs to live in the home in the future? Answers to these types of questions helps you include the house in a will or other estate plan.

Finally, if you are looking to shelter the home from future creditors or create tax savings or other benefits associated with the property, you might consider putting it in a trust. Holding real estate in a trust -- especially a home you're living in -- can get complex, so make sure you speak with an estate law professional about your options and goals before making any decisions.

Source: House Logic, "4 Reasons You Need an Estate Plan for Your Home," Richard Koreto, accessed March 10, 2017

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