Posted on: 18th Mar, 2009 02:31 am
I am curious. A good friend informed me that her Mother was advised NOT to do this because in the event of her death the state can claim all unpaid debt even though two thirds (I thought was the 2 siblings) Her attorney advised to will the home as a gift to avoid such action. Is this true?
Hi chdrost,
If you have unpaid debt on the property, you cannot make any change in its title. This kind of transfer can be considered as invalid and the state or the creditors can claim the outstanding balance of the loan. I don't think making a will can change that scenario. If a will is created, after the person's death the property will go through probate. In the probate if there is any unpaid debt on the property, it will be paid first and then the rest would be divided among the heirs.
If you have unpaid debt on the property, you cannot make any change in its title. This kind of transfer can be considered as invalid and the state or the creditors can claim the outstanding balance of the loan. I don't think making a will can change that scenario. If a will is created, after the person's death the property will go through probate. In the probate if there is any unpaid debt on the property, it will be paid first and then the rest would be divided among the heirs.