Home Mortgages After Death
Average life expectancy rates are increasing, and so are the circumstances in which mortgages are being carried into retirement and outstanding balances remain after death. Planning for property ownership and debt responsibilities before passing them on to loved ones is more important than ever.
Transfer of Mortgage Ownership
What happens to personal property or real property such as a home after a person dies is complicated. If there is a will and the home is designated to a person in the will, that person (the heir) receives the home. If a person dies without a will then intestate law applies, which follows familial lineage guidelines. This means the home is designated to a spouse, state-registered domestic partner, child, parent, sibling, grandparent, aunt and uncle or niece and nephew, in that order, depending on state law.
Sometimes a will is not enough. The decedent’s property first must satisfy any remaining debts, even if the mortgage is paid off. If the decedent has enough liquid assets to pay off the mortgage, the bank will “forgive” the debt and the heir will receive the home without debt owed. However, if there are not enough liquid assets to pay off the mortgage after death, the heir can either take over the loan, refinance the loan in the heir’s name, or perform a reverse mortgage.
Deed, Title Transfer, or Co-Signers
A person’s name on a deed, title transfer or mortgage co-signer will come into play legally after death, so eliminate confusion for your loved ones and ensure the names on the will match those on the deed and mortgage.
Why is this important?
Death is an emotional time. Adding the stress of what happens to the home, debts, and personal property can all be eliminated by creating a My Life & Wishes plan. It’s your life, but it’s their future. Make sure it’s a happy one.
In a recent report, Care.com talked about the importance of end-of-life planning and included My Life and Wishes as the “best on-line end-of-life planning and document service(s)”. In a related Article, Kim Komando names My Life and Wishes as one of her top picks on organizing end-of-life plans.
What information do people need to access in emergency situations? A trip to the ER may require: List of allergies, current medications, medical history, doctor contacts, family contacts, insurance information, photo identification. A fire or natural disaster may require: Identification documents, insurance documents, proof of ownership (such as deeds or titles), access to bank accounts for emergency cash, pet location information, medical information and family contact information. So where do you keep this information? Is it accessible and is it secure?
Over the last few weeks we have been talking a lot about passwords and security. At My Life & Wishes security isn’t just a feature, it is our foundation. Keeping your information safe and secure is our highest priority. We are happy to announce even more security is now available. Two Factor Authentication has been added to the My Life & Wishes service.
Are you doing enough to deter hackers from gaining access to your devices and information? One of the best ways to protect your information is to use strong passwords. According to statistics, more than 90% of passwords are vulnerable to password hacking. And over 50% of us reuse our passwords across many accounts. Here are some things you SHOULDN’T do when it comes to passwords;