Buying a home can be one of the most rewarding purchases in your lifetime. That’s why it’s always important to plan for what happens to your property and loans after you pass. Most people fear that their outstanding debts will be passed on to their family, but the good news is that in the USA, the mortgage stays with the home, not the person.
This does not mean it goes away if you pass away. If you are the sole owner of the property and mortgage, it must be paid from your estate. In most cases, if you bought property with your spouse, they will take over the mortgage and the financial institution may reassess the terms depending on the situation.
If you have a property you would like to gift to a specific heir, it is important you make these wishes known in your legal will. Further, you will want to specify if you want the estate to pay off any debts on the property so the person inheriting it is free and clear if that is your intention. You’ll want to understand what types of debts will need to be paid and what your insurance policies will cover before you are able to divvy up your assets as you would like.
Beyond your Last Will and Testament you should prepare your Power of Attorney documents. While the name of these documents may vary from province to province, the purpose is similar: if you are incapacitated, who do you choose to speak and act on your behalf?
