What happens if I Will my house to my daughter and there is still a mortgage owed on it when I die? 15 Answers as of August 31, 2015

I don't have enough life insurance to cover all the loans on my properties. What happens if I bequeath a property to my daughter and there is still a lien against it? Is it better to be left in my estate so she personally won't have to deal with it? Is there any advantage to leaving it to her in my will?

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Law Office of Pamela Braynon | Pamela Y. Braynon
The lien is on the property not the person that owns the property. So if you die, the mortgage will still have to be paid regardless otherwise the house will be foreclosed on. If you leave it in your estate, the estate will have to be responsible for paying the mortgage. If there is no money in the estate the finance company will foreclose on the house anyway.
Answer Applies to: Florida
Replied: 8/31/2015
Christine Sabio Socrates Attorney at Law | Christine Socrates
You can leave the home to your daughter in your will however if there is a mortgage on the property, the bank will require her to either assume the mortgage or pay it off if she would like to keep the property. If you want to make sure that she gets the house, you would need to indicate that in your will. She can decide after your death if she would like to keep the home or she can disclaim it and it will go back into the estate.
Answer Applies to: Ohio
Replied: 8/27/2015
Stephens Gourley & Bywater | David A. Stephens
Your daughter would have to pay the mortgage to keep the house, if it is not paid for when you die.
Answer Applies to: Nevada
Replied: 8/25/2015
Ronald K. Nims LLC | Ronald K. Nims
If you have equity in the house, then giving it to her in your will is the best plan. If there is no equity, the lender will foreclose on the house when you die either way.
Answer Applies to: Ohio
Replied: 8/25/2015
The Schreiber Law Firm
The Schreiber Law Firm | Jeffrey D. Schreiber
Any method you use to covey the property is still subject to any mortgage lien on the property. The fact you are deceased does not remove the mortgage debt or the lien. Whoever inherits takes the property subject to paying off any existing liens.
Answer Applies to: California
Replied: 8/25/2015
    Wellerstein Law Group, P.C.
    Wellerstein Law Group, P.C. | Elisha Wellerstein
    If you leave the house in a Will to her with a mortgage, then she will inherit the house and the mortgage. Assuming the mortgage is smaller than the value of the home, your daughter can decide to keep the house and pay the mortgage, or she can sell the house, pay off the mortgage and keep any remaining balance for herself.
    Answer Applies to: New York
    Replied: 8/24/2015
    Law Offices of Richard M. Levy P.C.
    Law Offices of Richard M. Levy P.C. | Richard M. Levy
    The mortgage will have to be paid regardless to whom the house is left.
    Answer Applies to: New York
    Replied: 8/24/2015
    Law Ofices of Edwin K. Niles | Edwin K. Niles
    The answer depends on whether there is equity. Is the value more than the mortgage? If so, leave it to daughter. She will have to make the payments or the lender will foreclose. If you are upside down, some people just stop making payments and rent the property out to get some income. It can take 3 months to a year or so for the lender to complete a foreclosure.
    Answer Applies to: California
    Replied: 8/24/2015
    Law Offices of George H. Shers | George H. Shers
    The mortgage remains with the house. Your mortgage probably has a due on sale clause so the lender might be able to demand full payment. You have a choice of putting the property into a Trust or preparing a Will.
    Answer Applies to: California
    Replied: 8/24/2015
    Ashcraft & Ashcraft, Ltd.
    Ashcraft & Ashcraft, Ltd. | Randall C. Romei
    If you make a specific bequest of an asset and the asset secures a debt (like a house and mortgage) the debt stays with the property. Your daughter will not personally be responsible for the debt but the debt will remain on the property and if not paid the lender will foreclose on the property. If the asset is in the estate then the asset will be sold and the indebtedness that is secured by the asset will be sold. The remainder, if any, will be distributed as directed in the Will.
    Answer Applies to: Illinois
    Replied: 8/24/2015
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    You need to do some estate planning. There is no single answer to your query, and it reveals some options your might wish to consider and plan for. The lien, or mortgage, on the property will normally survive your death.
    Answer Applies to: Michigan
    Replied: 8/24/2015
    Minor, Bandonis and Haggerty, P.C.
    Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
    Your daughter would have to continue paying the mortgage payment. I'm not sure what you mean "left in my estate " everything passes to someone. You could leave a will that leaves your house to your daughter, and directs your personal representative to pay the mortgage. Then, other property would have to be sold to pay the mortgage. You really shouldn't be considering one property separate from the others. See a good estate planning lawyer, and map out what you have and what it will cost to settle your estate. Then you arrive at a plan that does what you want with all of your property. Trying to figure out what happens piecemeal means you end up with no plan at all. And I guarantee that no plan is the most expensive and least effective plan.
    Answer Applies to: Oregon
    Replied: 8/24/2015
    Attorney At Law | James G. Maguire
    If you leave your home to your daughter, the mortgage will go along with it. Your daughter will have to make the mortgage payments if she wants to stay in the house, or she could sell it and pay off the mortgage and keep the rest of the proceeds.
    Answer Applies to: Louisiana
    Replied: 8/24/2015
    O'Keefe Legal Services, L.L.C.
    O'Keefe Legal Services, L.L.C. | Sean P. O'Keefe
    In Maryland, bequeathing a house with an outstanding mortgage to a child will require the child (or someone) to pay/continue the mortgage. If a property has a lien against it, then the lien may need to be satisfied prior to transferring title to the property, or the lien may continue to exist against the property. There can be advantages and disadvantages in transferring property through one's will, but what is best depends on the goal(s) one is trying to accomplish.
    Answer Applies to: Maryland
    Replied: 8/24/2015
    Law Office Of Victor Waid
    Law Office Of Victor Waid | Victor Waid
    Of course, the bank will want their money; she will have to make arrangements with the bank to take over the loan, or will have to sell the asset to cover the loan as the bank is entitled to call the loan, or they will foreclose.
    Answer Applies to: California
    Replied: 8/24/2015
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