Is an executor PERSONALLY responsible to pay off a mortgage that is underwater?
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Is an executor PERSONALLY responsible to pay off a mortgage that is underwater?
My aunt is executor for her daughter who died
without a will. She had few assets and a
mortgage on her house. The lawyer helping
this 85 year old is telling her if the bank
forecloses she is responsible for the difference.
I cannot convince her that she is responsible to
pay out of estate funds but not personally. She
thinks she must use her personal savings. She
was not a co signer or in any way connected to
the property.
Asked on April 30, 2017 under Estate Planning, Virginia
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
Executors are not personally liable for debts of an estate. Estate assets (money in bank accounts or other assets that can be sold) are used to pay them off. Again, an executor (or beneficiary/heir) does not become personally liable for any estate debts. Accordingly, any deficiency left after the house is sold is not your aunt's financial responsibilty; the deficiency will simply be written off if there are not enough money in the estate to pay it. Possibly your aunt misunderstood what the attorney said, if not, it may be time for new legal counsel.
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
No, executors (or that matter, heirs or beneficiaries) do not become personally liable for the debts of the estate or the deceased. Estate assets (e.g. money in any estate bank accounts) can be required to be used for these debts, but the executor or heirs do not need to go out of pocket to pay them.
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