Owning your first home is one of the largest purchases you will ever make.
But there’s something else that new homeowners don’t think about…
Once you get that smart house you’ve been dreaming about and move into it, you now have something that needs protecting.
The day you get those keys is the day you should start thinking legacy.
Too many first-time homeowners are crunching numbers on mortgage rates and prepping for closing costs. But no one is thinking about what happens when they’re no longer here to enjoy that house.
What happens to their biggest asset if the unexpected occurs?
Someone needs to take care of your house after you’re gone. And if you don’t plan for it? The people you love will be stuck navigating a confusing legal process.
Inside this article, we cover:
- How Buying a Home Alters the Need for Estate Planning
- Why Your Home Needs an Estate Plan
- Essential Estate Planning Documents
- Mistakes to Avoid with your First Home
How Buying a Home Alters the Need for Estate Planning
Renting an apartment and buying a older home are two very different things.
As a renter, you don’t have to worry about who will inherit your apartment after you kick the bucket.
But as a homeowner, that house you purchased is likely your largest asset. And if you don’t have a plan for that asset, it can cause major headaches for your loved ones.
You own a home but die without a will or trust. What happens to your house? It will likely go through probate.
Probate is a legal process that could take months or even years to complete.
Not only is it a hassle for your family, but it can also cost thousands of dollars in legal fees. And the only way to avoid probate is by having a properly funded trust.
According to Trust & Will’s 2025 report, 55% of Americans have zero estate plan. Over half of homeowners are doing NOTHING to protect their biggest investment.
Estate planning is something most people know they should do. But for some reason, they just put it off…
Why Your Home Needs an Estate Plan
Estate planning doesn’t have to be difficult.
At its core, estate planning is making sure your assets are protected both during your lifetime and after you pass away.
When you own a home, that’s your most valuable asset that needs protecting.
Here are some of the things you should know about estate planning as a homeowner:
- A Will lets you name who will inherit your home
- A Trust allows your estate to avoid probate
- Beneficiary Designations let you name who inherits your assets
- Powers of Attorney give someone you trust the ability to make decisions if you can no longer do so
Just because you understand the value of estate planning doesn’t mean you have to jump into it alone.
Working with professional estate planning services ensures everything is done correctly.
Essential Estate Planning Documents
When it comes to estate planning, many new homeowners want to know what documents they need. Truthfully, it depends on your situation. But there are a couple that apply to everyone.
Last Will and Testament
Your Will is the foundation of your estate plan.
This document goes through probate and allows you to name an executor of your estate. The executor will ensure your wishes are carried out and handle any legal matters.
As a homeowner, you should have a Will that…
…names who will inherit your home. If you don’t have a Will when you pass away, then your home will be distributed via state laws.
For instance, if you’re married but have children from a previous relationship, your home may not automatically go to your spouse.
Living Trust
A Trust owns property during your life and then transfers it upon death.
A primary benefit of having a trust is that it avoids probate.
Instead of going through probate, your home is transferred directly to your beneficiaries.
Power of Attorney
In the event you become incapacitated but don’t pass away, you’ll want someone you trust to be able to handle your finances.
With a Power of Attorney document, you can name a trusted person to make financial decisions on your behalf.
That includes making mortgage payments on your home, paying property taxes, and even selling the home if necessary.
Healthcare Directive
A Healthcare Directive doesn’t give someone power over your property, but it’s still important to have.
It allows you to state your wishes for medical care if you’re unable to communicate.
Less stress for your family is always a good thing.
Mistakes to Avoid with your First Home
Sure, people know they should plan for the future. But that doesn’t stop them from making mistakes along the way.
Even if you know estate planning is important, these errors could derail your estate plan before it even gets started.
Waiting
This is the most common mistake.
We all know someone who said they “need to get around to” estate planning. But then life happens and they never actually do it.
Don’t wait until “someday.” The longer you wait, the more likely something will happen to prevent you from getting your estate in order.
Research from MDRT found that 45% of consumers haven’t done ANYTHING to prepare their estate.
You hear that. Forty-Five Percent.
That means if you died today, almost HALF of America would be completely unprepared.
Doing it Yourself
Estate planning is not a DIY project. Yes, you can download documents online and create your own estate plan. But that’s also a great way to do it wrong.
Every state has different laws about Will’s, Trusts, property transfer, powers of attorney, and more.
Just because something is LEGAL in one state doesn’t mean it will be recognized in another.
Work with professionals who know estate planning laws specific to your state.
Not Updating your Estate Plan
Your estate plan isn’t something you create and then forget about.
Life changes all the time. You could get married, divorced, have kids, or relocate to another state.
Any of these life events can drastically change how you want your estate handled.
Failing to Title Your Home Correctly
How your home is titled makes a difference in who inherits your property.
There’s joint tenancy, tenancy in common, community property with right of survivorship… it all matters.
Incorrect titling can supersede what’s in your Will.
A lot of first-time homeowners aren’t aware of how their home is titled.
Not Talking to Your Family
You can have all of these documents drafted up, but what good is that if your family doesn’t know about it? Make sure your loved ones know your estate plan is in place.
Tell them where to find important documents.
The last thing you want is your family figuring this all out after you’re gone.
Going through grief is difficult enough. Don’t make it worse by leaving your family behind to guess your wishes.
What’s the Bottom Line?
Purchasing your first home is exciting.
It’s stressful. And buying a home gives you new responsibilities you might not have thought about.
Legacy planning isn’t fun to think about. But it’s one of the most crucial steps you can take as a homeowner.
It ensures your house is protected, your family is taken care of, and your legacy lives on for generations.
There’s a reason why estate planning has been coined The Great Wealth Transfer.
Due to retirement, $84 trillion is expected to transfer from older generations to the next.
Let’s hope yours isn’t going through probate.
Don’t be part of the 55%. Start your estate plan today.
Talk to a professional who can guide you through the process. Have the necessary documents drafted up and stored safely.
Then sit back and enjoy that new home, because you have your legacy secured.
It’s time to start thinking legacy.
