If an inherited house goes into foreclosure before it is transferred into the beneficiaries names, can the bank try to get their money from the deceased’sIRA to settle the debt owed?

My 2 siblings and I inherited my father’s home. There was a TOD for the house so it avoided probate and hasn’t been transferred yet. Probate assets are his bank account and truck. The house has been on the market for awhile and has not sold. We also inherited his IRA, which transferred directly to us when he died.

Asked on November 7, 2011 under Estate Planning, Ohio

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If a home that you inherited or were to inherit is lost in foreclosure before legal title is transferred to you, whether the lender that foreclosed upon it can claim a deficiency owed against the estate whose name the property is in depends upon whether the loan that was foreclosed upon was purchase money or not and if your state has anti-deficiency statutes.

If the answer is yes, then the lending institution cannot go after assets of the estate to satisfy any deficiency claims. Likewise, if your state has laws prohibiting deficiency judgments regarding non-judicial foreclosures may also prevent a deficiency claim if the foreclosure is by way of a non-judicial foreclosure.

I suggets that you consult with a real estate attorney regarding your question for further answers. Good luck.


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