By Dick Thackston
The simplest answer to this question is it changes owners; the problem is to whom, how and when.
Many people do not fully think through or plan for the disposition of assets after their death. While the situation ultimately affects us all, the situation has been worsened with the current collapse of housing prices and over mortgaging. Sadly the lack of planning results in confusion as to ownership, costly legal fees and time consuming delays for the family and friends trying to resolve estates. The worst situation can be over promising by the deceased and the heirs or presumed heirs are at each other’s throats while waiting to ride a dead man’s horse.
In the last several months we have seen several of these situations pop up.
There are two cases that seem worth a quick look:
Case #1 Husband dies with an old Will and a new wife. The husband owned a home prior to marrying the new wife but never adds her to the ownership of the property.
In this situation the wife does not automatically own the property. In fact she may not have any equitable rights to the property what-so-ever. Depending upon how well everyone involved gets along this could be quite messy with no Will to the contrary and a written Will specifically leaving his property to someone other than his wife at the time of his death, the Probate Court might determine that his intent was not to leave the property to his wife. What might the wife’s reason to the Probate Court be for vacating the old Will? She will need to hire an attorney to petition the Probate Court, vacate the old Will, settle with the other natural heirs – this means pay them for a share of the property and hopefully be awarded ownership of her home.
Case#2 Elderly parent dies with a Will and leaves his home to his two sons however the property is heavily mortgaged and the son’s did not know there was a mortgage and have not made any mortgage payments. The property is now being foreclosed upon.
Death does not eliminate the mortgage; the money is still owed to the lender. In this case the first thing the sons should do is advise the lawyer that is probating the estate of the situation. In all probability the bank will stop the foreclosure temporarily while the estate is being sorted out, however this is not because they are being nice. In this case the lender becomes a creditor of the estate and will probably look to the Probate Court to pay the full balance with all interest and fees due out of the estate. The sons will only normally be entitled to whatever is left over.