What to do if my mother passed away recently and she had left her home and all bank accounts in trust to me?
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What to do if my mother passed away recently and she had left her home and all bank accounts in trust to me?
I am unable to purchase/sell her home as it is not worth what the mortgage company is owed (upside down by $50,000). If I surrender the house to the mortgage company, will that be enough to satisfy her loan or will they come after the small amount of life insurance and money she left to me as well?
Asked on January 7, 2013 under Estate Planning, Illinois
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
I am so sorry for your loss. Leaving assets in a trust generally means that they are protected from attachment by creditors but it really depends on the type of trust and how it is written. I would see if the mortgage company will allow you a short sale with a waver of the deficiency (the $50,000) or a deed in lieu of foreclosure if that fits the facts of this case. You are going to have to speak with an attorney who can read the trust and look at the assets involved. If the life insurance passed to you automatically it should be protected regardless. Good luck.
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