Home Reversion Plan Explained
We all know that things change. People grow older, they get married, have kids, and move to new cities for work. As life changes, so do family dynamics. One of the most important decisions you can make in regards to your home is what will happen with it once you’re gone or no longer able to maintain it.
The Home Reversion Plan is a way of releasing equity and a legal document that provides instructions on what should happen to your home once you’re no longer able to take care of it. It’s an important way for you and your family members to plan ahead for their future, and can help avoid or alleviate conflicts about the distribution of property after death when things get complicated.
Homeowners have three choices – keep ownership in one person, distribute assets equally among heirs; turn over the house eventually back into the hands of a relative or friend (or sell it); let someone else own the home outright with some agreement as to how much they will pay each year in rent until there are enough funds saved up from rental income.
Also, you can put a time limit on the Home Reversion Plan, so that it goes into effect at a certain date or after your death.
The first step is sitting down and discussing these issues with family members; evaluate who’s in the best position to take care of things, both financially as well as emotionally; and decide which option makes sense given their age and experiences in life. Your estate plan should include this conversation, along with any documents necessary to carry out each option outlined above (e.g., beneficiary designation forms). If there are disagreements about some aspect of the decision, an attorney may be able to help you and your family come to a resolution.
The idea of Home Reversion Plan is that when the time comes, there will be few surprises – it’s all been talked about ahead of time with close friends and loved ones so that everyone can make their own peace with what lies in store for them.