What to do if you die and your house isn’t paid off?

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What to do if you die and your house isn’t paid off?

IF WHEN I DIE AND MY HOUSE ISN’T PAID FOR YET COULD MY SON (ONLY CHILD; NO SPOUSE) BUY IT FOR WHAT I OWE OR CAN HE GET TO SELL IT? OR WILL THE STATE TAKE IT FOR ANY BILLS THAT I LEAVE UNPAID?

Asked on March 13, 2011 under Estate Planning, North Carolina

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The questions that you are asking show forethought in to estate planning, which is very wise in this day and age.  Unfortunately it is very difficult to do in this type of forum.  Someone needs to look at the whole picture to tell you what the best way to go is.  Generally speaking, you son can not assume the mortgage without applying to the bank to do so.  The mortgage is not transferable.  Can you Will him the house and can he pay off the mortgage and own it outright?  Yes, but that may cause a lot of tax liability for the estate.  And yes, the estate has to pay off any debt owed by you when you pass away and if that means selling the house to do so then that may be what needs to be done.  So I would go an speak with someone about the idea of a trust and having the house be part of the trust and then your son be the beneficiary of the trust.  That avoids probate and some other issues.  Good luck to you.


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