How to Protect Your Dream Home
June is National Homeownership Month, a great time to discuss how to protect homeownership and ensure future generations have access to safe and affordable housing.
1. Check Your Title
You might think you own your home, but it's essential to determine who is listed on the deed. If you stayed in the family home after a parent passed away or if only one spouse is on the paperwork, you might be living in a house that isn't legally yours. If your name isn't on the deed, you can't help with foreclosure prevention, get a home loan, or apply for home repair grants. To check your ownership status, look at your deeds and tax statements or visit the county clerk's office.
2. Make a Plan for Everyone
Some tricky foreclosure situations happen when borrowers pass away without planning for others living in the home. Think about an unmarried partner or one of five children. Neither would have rights to the house if the title isn't clear. The unmarried partner has no legal rights, and if a child has four siblings, they can't act alone without the others. Having a clear plan can save a lot of heartache.
3. Customize Your Plan
Consider different estate planning options for your home. If you think you might need Medicaid for long-term care later, finish your estate planning quickly to avoid penalties related to the 5-year lookback period.
Last Will and Testament: List your home and the person you want to inherit it. That person will need to go to the Surrogate's Court to get the title, but you can choose anyone as your heir.
Life Estate Deed: You can keep the right to live in the home for the rest of your life and automatically pass it on after your death. If there is a mortgage, the beneficiary must be a spouse or child; adding other names could trigger immediate payment of the mortgage.
Trust: You can name someone to manage your property. If there is a mortgage, you must be the trust's beneficiary, so the mortgage doesn't need to be paid immediately.
You can also add a loved one to your deed as a joint tenant with the right of survivorship. If you have a mortgage, the added person must be your spouse or child; adding someone else would make the mortgage due immediately.
Another option is a "transfer on death deed." This allows you to name a beneficiary who'll bypass the Surrogate's Court. Creditors will have 18 months after your death to collect any debts you had, and your named beneficiary must pay those off. This option does not start the Medicaid 5-year lookback period.
