Dear Liz: We are updating our estate plan to take into account that we will be transferring our home to our six children when we pass away. There is currently a large mortgage outstanding on the house. We want to avoid having to go through probate and not have the mortgage balance paid right away.
We understand that there are many different options for relocation, all of which have their pros and cons. Are there any best practices recommended for our situation?
answer: yes. Discuss your situation with an experienced estate planning attorney who can provide you with personalized advice. Estate planning can get complicated quickly, and professional guidance is usually worth the cost.
Your attorney will likely suggest creating a living trust to avoid probate, the court process for settling an estate. Another way to avoid probate in many states is a transfer on death deed. While a deed may be a solution for small estates, a trust allows you to transfer other assets in addition to your home, gives you control over your estate, and also allows for incapacity planning. It will be easier to stand.
You probably don’t have to worry about whether a lender will offer you a loan right away. Mortgages may include a clause that technically requires the full balance to be paid if the home is sold or transferred. However, heirs are generally protected from these provisions by state and federal law as long as payments continue while the estate is being liquidated. Your attorney can explain your state’s protections in more detail.
With a living trust, a successor trustee can access other funds in the trust to make payments during estate settlement, he said. Jennifer Southey Long Beach Estate Planning Attorney. If there is a transfer on death deed, your heirs will be responsible for payment.
Heirs can often take over the mortgage, but six people owning one home can be unwieldy at best. Perhaps the best solution is to have your real estate agent continue to pay your mortgage until your home sells.
Dear Liz: My father recently passed away. Although he was formally married, three years before his death his wife kicked him out of his home and he became homeless.Is she eligible for Social Security? Survivor benefit?
answer: Social Security does not attempt to assess how long a couple has been married. As long as they are legally married, she may be eligible for survivor benefits.
Liz Weston is a certified financial planner and personal finance columnist in the United States. Nerd wallet. Questions can be directed to 3940 Laurel Canyon, No. 238, Studio City, CA 91604 or by using the “Contact” form below. askrizweston.com.