My children are beneficiaries on my mortgage. Will they have to go through probate I when I die?

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My children are beneficiaries on my mortgage. Will they have to go through probate I when I die?

I live in Illinois. I am not married. My adult daughters are the beneficiaries on my
home loan. If I die will they get the house without having to file probate? What about
after the mortgage is paid off?

Asked on July 9, 2017 under Estate Planning, Illinois

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

They would only get the home without probate if they were on the title of the home with you, specifically as joint tenants with right of survivorship (JTROS); in that case on the death of one owner ("tenant") the surviving owners ("tenants") automatically receive her share without the home becoming part of the deceased's estate or going through probate. There are downsides to doing this, since you would be giving them partial ownership of your home *now*, so they would have rights to it and some control over it.
Alternately, you could give them the home now BUT retain a "life estate": you will have the right to possess, occupy, use, etc. the home without their interference for the remainder of your life, subject only to your obligation to take reasonable steps (e.g. maintenance) to preserve its value for them in the future. You will not be able to sell the home or get its equity, but will be able to live there for the rest of you life.
If you want to consider either of these options, speak with a real estate attorney.


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