Ask a Question

How can assets be protected if mom dies before property is paid for?

If it were sold today, my mother's condo would probably go for about $40K less than is still owed the lender. Her concern is what would happen to her assets (savings and investments accounts) were she to die before the property is paid for, or while it's still under water? She would like any remaining assets to pass down to her heirs and wonders if there is a way to seperate the under water property from the accounts (assets) to protect what remains in them. Currently her heirs are listed as beneficiaries on the accounts, and then she just has a will (not a trust). A lawyer told her with a will the lender has only 6 months to stake a claim to the assets in an estate, whereas with a trust, the lender would have 2 years, so she decided to stick with a will, in the hopes, I guess, that the lender does not claim the balance owed on the property within the 6 months. Is this the best strategy? Thanks for any thoughts folks may have on how best to plan for this.
Status: Open    Nov 01, 2015 - 01:14 PM

Finance, Elder Law

Do you have the same question? Follow this Question

1 answer

Expert Answers

Nov 05, 2015 - 11:06 AM

If there are assets that go through an estate, ie probate, meaning no beneficiary is listed, then the executor is required to pay debts like a mortgage out of those monies.

If the accounts are direct beneficiary, very likely no assets will go through probate and thus there will technically be no assets to pay the debt with in the estate.

The debt will not pass on to the children unless they cosigned for the loan.
Answer this question

Recently Active Members