Attorney Thomas B. Burton answers a reader question about her rights, responsibilities and options after inheriting a home subject to a mortgage from her grandmother.
Transcript of Video: I Inherited a Home with a Mortgage When My Grandmother Passed--What Can I Do?
Today's question comes from Milwaukee
Wisconsin and the reader asked the
following what can I do I inherited a
home with a mortgage when my grandmother
passed I am completely out of my area of
expertise my grandmother passed and I
inherited the duplex with a mortgage
attached balance on the mortgage is
less than $20,000 what are my options
obligations rights assistance available
for me I want to save my legacy I grew
up in this house so the answer is that
the mortgage is a lien on the property
that continues after your grandmother's
death so you take the property subject
to the mortgage if you want to keep it
you need to keep making the mortgage
payment now if your grandmother left you
other assets such as cash you could use
that money to pay the mortgage payment
the other thing is I am not sure here if
there was a Will leaving it to you or if
she left it to you via trust or a
transfer on death deed because if
there's a Will then the property may
need to go through probate the good news
is this is a gift from your grandmother
and it's tax-free to you whatever the
equity in that condo I believe or duplex
is tax free gift to you upon death the
other good thing is your grandmother
left it to you at death so you'll receive a
stepped-up basis meaning I recommend you
get the property appraised because your
basis for tax reasons is now whatever it
was worth on the date of your
grandmother's death instead of what she
bought it for which was likely much less
then if you go to sell the property some
day you would have that new basis but
again you will need to make the mortgage
payments going forward if you want to
keep the property and then if and when
you do pay off the mortgage make sure
you get that release from the bank to
show that you now own it outright free
and clear so if you have more questions
about this I recommend you speak with a
qualified probate and estate planning
attorney in Milwaukee
and they can help guide you through the
process of giving this property fully
into your name and you taking control
great question and thank you for asking
and if you're a listener out there
watching these videos and you have a
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in an upcoming video thanks for watching.
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