Protecting your Home

By: Kimberly A. Paton, Esq., The Paton Law Firm, LLC

For most of us, our home is our biggest investment; and not just our biggest financial investment.  We raise our children here, plant in our gardens, maintain the lawns, add patios for family barbecues.  We spend our holidays together and have the children’s growth charts on the door jam.  So, it is also a very special asset.  We need to make sure that we protect this very large and special asset.

Some of the more common protections are:

  1. Proper homeowners’ insurance—always check the amount and type of coverage with your insurance agent, at least annually.  Also confirm that the owner is listed properly on the insurance; and that the premiums are paid timely.  As we get older, it is easy to miss a payment.  The Insurance companies will let you add a contact person (a child, friend, family member) who will be notified if you do forget.  Take advantage of this.  Also, notify the insurance company if the house is vacant, you may need a special rider.
  2. Regular Maintenance—remember that a “Stitch in Time Saves Nine”.  Address any issues as soon as you see them.  Regularly, walk around the house as if you were buying this house now.  What needs to be done? Find the little issues—a small leak in the window; gutters that are clogged; landscaping that causes water in the basement.  Loose steps, gates that don’t lock, fire pit too close to trees or a house, garage, shed, etc.  Imagine the property damage or personal injury that could happen.  All of these can lead to big damages.
  3. Proper ownership/title of the house—There are financial benefits of being a homeowner—income tax deductions for  real estate taxes/mortgage interest; Senior Discounts and veteran’s discounts; Anchor Program (f/k/a Homestead Rebate); etc.  Assure that the actual owner is listed properly on the deed.  Sometimes, people forget to update the deed after mom or dad dies or if they are divorced.  If you are divorced, change the deed.  Don’t rely on the Property Settlement Agreement.  This will save a lot of unnecessary legal expenses.
  4. Asset Protection Irrevocable Trusts—an Irrevocable Trust is good tool to protect your home from creditors, family disputes, unintended consequences.  We at the Paton Law Firm, can review the benefits of transferring your home into an Irrevocable Trust and allow the children or other trusted individual to maintain the house as the Trustee, and you can still live in the house.  This technique is often used to limit liability, plan for Medicaid or VA benefits, assure that the children inherit the house if the parents are in a second marriage.  NOTE THAT there are negative consequences too, so please call us to review your situation and goals before making any decisions.
  5. Proper Estate Planning—regularly, we have clients who have a child that lives in their home, for a multitude of reasons.  If the parents die and they have no plan for what happens to the home,  the children can disagree and argue.  We have represented families in court trying to confirm the parents’ instructions, or evicting the child in the house, or working out a settlement among the children.  This all costs money, time and family strife.  We can help you draft a Will, Trust and an Estate Plan that will avoid this uncertainty and family upheaval.  We can also suggest ways to equalize distributions if you decide to leave the home to one child. 

Kimberly A. Paton, Esq. is the managing Partner at The Paton Law Firm, LLC in Fair Lawn, NJ with over 35 years of experience and is licensed in New Jersey and New York.

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