Homeowner Estate Planning: Real Estate Tips

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Ready to move estate planning to the front burner? Homeowners, especially, need to have a plan in place. If there is no will, and no other arrangements for the home to pass to a co-owner, it will pass according to the state intestacy provisions. That’s not an estate plan. There’s no better time than the present to choose a beneficiary, and make an estate plan.  

Here is the basic set of options, and how they might play out—financially, legally, and in emotional terms. We include a few tips to note in the process. Any or all could be a great conversation starter with your lawyer or financial adviser. Schedule a talk with family or other beneficiaries, too.

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Should You Get a Reverse Mortgage? Consider This.

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Time to start a new chapter in your life? A reverse mortgage can be an option if your goals include:

  • Getting a degree.
  • Helping someone else through college.
  • Covering major dental or medical expenses.
  • Starting new creative projects or business ideas.
  • Enjoying recreation and travel.
  • Having funds to tide you over until you qualify for full Social Security benefits.

A reverse mortgage is available to homeowners who have paid off most or all of their mortgages. The name describes a lender’s monthly payments to the homeowner, rather than the reverse.   

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The Golden Years, With a Paid-Off Mortgage

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We’ve talked about scams, and the risks that can be involved in delegating a power of attorney to another person. Now, let’s uplift the mood. Visualize the day you submit that very last mortgage payment.

Congrats! Your debt is satisfied.

Your certificate of satisfaction can now be recorded in the county where your home is. If your home is in a deed of trust state, the deed of trust now comes off your title. A deed of reconveyance is the deed of trust state’s equivalent to the deed of release of mortgage.

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Unexpected Real Estate Title Defects: How to File a Claim With the Insurance Company

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Much is said on the role of title insurance in protecting protect the buyer from unknown liens, easement holders, or a prior owners’ heirs who claim an interest in the buyer’s new home. 

Title insurance covers the policy holder against loss related to these various defects in title. Other examples of title defects include undisclosed restrictive covenants on the property, documents recorded with mistakes, and fraudulent or otherwise invalid transactions in the chain of title. A good title insurance policy protects the policy holder against property devaluation stemming from such problems if they arose during a previous ownership, unbeknownst to the buyer. The role of the title insurer is to defend the policy holder against legal challenges to the title, and to pay the policy holder for covered losses in value.

So far, so good.

But what happens if there is a title defect, and the owner actually has to use the title insurance? 

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New Risks for Property Owners: Economic and Physical Effects of Climate Change

Image of a house with ocean waves splashing under it meant to represent rising sea levels caused by climate changing. Photo by Clint Patterson via Unsplash

This story, alas, is unfolding. Physical signs of a heating world and its shifting weather patterns appear in tropical storms and in sea level rise, in heat waves, droughts, and wildfires. The economic and physical impacts of climate change are making their mark on real estate

Affected cities have already paid heavy costs in repairs and reconstruction, insurance premiums, and loss of trade and tourism. Real estate markets are seeing severe weather events steadily chip away at property values. Public initiatives to mitigate risks will increase taxes, code compliance burdens, and financing costs.

In other words, the risks go well beyond destructive incidents from specific disasters. They include higher capital and maintenance costs related to fire, water, and weather damage on properties over time. To anticipate the risk of climate-related damage, analysts are mapping properties—feeding site-specific data into geophysical, hydrological, and economic models. 

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Property Title? Deed? What’s the Difference?

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When you buy a home, you receive the deed. And you hold title. The deed and title are interrelated yet distinct concepts.

Title refers to ownership, including the legal right to possess and use a parcel, the right to exclude others from using it, and the right to transfer your interest to others.

If you do transfer your property to another person, the deed is the vehicle that moves your legal interest in the property to the other party.

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How to Prove Ownership of Real Estate

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You own real estate. If you’re asked, how do you show proof of your ownership?

Essentially, the proof is in your property’s title history. This means: 

  • Your ownership interest is only as good as the interest conveyed to you by the last owner; and
  • Others could have dibs on your property, if you used it to borrow money.

Of course, when you bought your home, the title company researched the chain of title to ensure previous owner had the right to convey to property to you. How do you check the chain of title now? The county keeps records. Many county websites make the information accessible online, so you can look up mortgages, other liens, and deeds that pertain to your property.

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