Why you should write a Will when you buy your first house

Why buying a home is a trigger

Buying your first home is usually the moment you acquire your biggest asset — and the moment your estate planning goes from theoretical to genuinely important. For many people it is also the first time they buy something with another person, take on a large debt, and start thinking seriously about what would happen if one of them died. That makes it the ideal time to write a will.

How a house passes when someone dies

The answer depends on how the home is legally owned:

• joint tenants — the most common way couples own a home together. When one owner dies, the home automatically passes to the surviving owner, regardless of the will; or
• tenants in common — each owner’s share is separate. When one owner dies, their share passes according to their will (or the intestacy rules if there is no will).

If there is a mortgage, the debt is also part of the picture — the surviving owner (or the estate) generally remains responsible for it, which is why mortgage protection insurance and life cover are worth thinking about alongside the will.

Why write a will when you buy

Buying a home makes a will important because:

• it is likely your most valuable asset — you should decide what happens to your share;
• if you own as tenants in common, your share passes under your will;
• if you own jointly and want your share to benefit someone other than the other owner, a will cannot change survivorship — so ownership structure matters;
• if you die without a will, your share (or your estate’s interest) is distributed under intestacy rules, which may not match your wishes;
• if you have a partner and children from an earlier relationship, a will balances everyone’s interests; and
• both buyers should have wills — not just one.

What to decide

At purchase time, think about:

• who should receive your share of the home, or the right to live in it;
• whether your partner and children can stay in the home, and for how long;
• how the property should be owned — joint tenants or tenants in common — and what each choice means;
• how the mortgage would be handled, and whether insurance or life cover is needed;
• what happens if a future sale is needed; and
• how relationship property rules interact with the home, especially for de facto partners.

Common mistakes

Home buyers often assume things that are not true:

• “we own it jointly, so we don’t need wills” — survivorship covers the house, but not the rest of your estate, and not if you own as tenants in common;
• “my partner will get everything anyway” — not automatically, especially with children or early in a de facto relationship;
• “the mortgage dies with me” — it does not;
• “one will covers us both” — a will is personal to each person; and
• “we can sort it out later” — later is exactly when the sorting becomes hard.

Practical steps

Make a will part of the purchase process:

• ask your conveyancing lawyer how the property should be owned, and what that means for inheritance;
• write (or update) a will for each owner at the time of purchase;
• decide what should happen to the home if either of you dies;
• check mortgage and life insurance arrangements;
• tell your executors where the will is kept; and
• review the will when you pay down the mortgage, buy further property, or your circumstances change.

The bottom line

Your first home is the perfect prompt for your first will. Ownership structure decides what happens to the house; your will decides what happens to your share and the rest of your estate. Sort both out when you buy, so the home you worked so hard for goes to the people you choose, without dispute or delay.