Read This Before You Close: Protect Your New Home or Investment Property with a Solid Estate Plan

Guidance from a Birmingham, Alabama estate planning law firm.

Purchasing a new home or investment property is an exciting milestone — whether it is your first home, an upgrade, a downsize, or an investment to build wealth. Big life changes like this deserve thoughtful planning to protect your future and the people you love. Here are a few key steps every Alabama and Florida homeowner should consider taking before closing day to protect their new home or investment property with an estate plan.

 1. Align Your Property Title with Your Estate Plan

Before you close on your new property, meet with an Alabama estate planning attorney to discuss how you should hold title to your home or investment property. Should it be owned individually, jointly with rights of survivorship, in trust, or by a business entity? Coordinating your real estate ownership with your estate plan helps you avoid probate issues and ensures your property passes smoothly to your heirs.

After closing, revisit your will to make sure your new property is included. For example, if your will includes a specific gift of your old home, you will want to update the address. Additionally, if you have a trust designed to help your family avoid probate, make sure the deed reflects that the trust owns the property.

State-Specific Estate Planning Tips:

• Alabama: Ask an estate planning lawyer about options like revocable living trusts, joint tenancy with rights of survivorship, or life estate deeds to help your family avoid probate court.

• Florida: A Lady Bird deed can allow you to keep full control of your property during your lifetime while ensuring it passes directly to your beneficiaries without probate delays. You may also want to consider a revocable living trust or joint tenancy with rights of survivorship.

If you want your home to pass to a specific family member or be held in trust for your minor children, your deed and your estate plan should include clear instructions.

2. Review Your Disability and Life Insurance Coverage

A new mortgage is a major expense. Make sure your family can handle it if you become disabled or pass away unexpectedly. Now is a smart time to speak with your financial advisor about updating your life insurance and disability coverage. Adequate insurance protects your loved ones from unnecessary financial stress.

3. Double-Check Your Beneficiary Designations

Purchasing a home or investment property is a good reminder to review your beneficiary designations on life insurance, retirement accounts, and bank accounts. Outdated beneficiary designations can cause serious problems — like unintentionally disinheriting a loved one, leaving assets outright to a minor child with no oversight, or leaving assets to a beneficiary you no longer intend to benefit. Make sure your designations align with your current estate plan.

4. Confirm Your Property Is Properly Insured

If you will own your new property in the name of a trust, confirm with your insurance agent that your trust will be listed as an additional insured on your homeowner’s insurance policy. This helps avoid coverage gaps.

While you are speaking with your insurance agent, ask about potential discounts. Bundling your homeowner’s insurance policy with your auto or umbrella coverage can save you money.

5. Update Your Address with the Right Agencies

Once you move, remember to update your address with the U.S. Postal Service — you can do this online or in person — so your mail is forwarded correctly. Also, notify the IRS using Form 8822 and update your state tax agency to ensure you receive any tax notices, refunds, or legal correspondence.

Your Next Step

Buying a new home or investment property is a huge step — but without a plan in place, your new investment could create unnecessary legal headaches for your family. At Provident Law / Estate Planning LLC, we help families in Alabama and Florida protect what matters most.

As you move forward with your estate planning, we invite you to contact our team. We will guide you through the process, ensuring your plan is tailored to your unique needs and goals. Whether you are creating a will, establishing a trust, planning for incapacity, or reviewing existing documents, we are here to provide the personalized guidance you need. Reach out today to schedule a consultation and take the next step to give your family peace of mind.

About the Author

Colin McMichen is an experienced attorney and the founder of Provident Law / Estate Planning LLC, a Birmingham, Alabama based firm. With a focus on estate planning and probate law, Colin is dedicated to helping individuals and families make estate planning easy.