The Purchase of a New Home Can Change Your Estate Plan

Real Estate is distributed upon the death of the owner based on how it was titled. This means if two people buy a home as Joint Tenants With Right Of Survivorship and one dies, the home automatically goes to the other owner. This happens regardless of what the deceased owner’s will says.

In many blended families, the plan is not to leave the marital home entirely to the surviving spouse. The husband and wife each have their estate plans set to avoid leaving the house solely to the survivor. Then the couple purchases a new home and is asked, “How would you like to take title to the new home?” The couple responds with, “We don’t know.” The title agent then tells the couple that most couples take title as joint tenants with right of survivorship. This option means that the house, or other real estate, would pass automatically to the surviving spouse after the death of the other spouse. Not thinking about the eventual estate planning consequences of this decision, the couple elects to take title to their new home as joint tenants with rights of survivorship.

When meeting with a new client, I always obtain a copy of the deed to a client’s real estate. This way I can make sure that the real estate passes in the way that the client wants. If you have purchased any real estate since your estate plan was last updated, you should reach out to your attorney to make sure that the real estate is titled in a way that does not conflict with your estate plan.