Attorney Thomas B. Burton answers the following question:
Should I keep my deceased sister's house or walk away?
Want to know what type of estate planning documents are best for your situation? Download a free copy of my easy estate planning guide.
Transcript of Video: Should I keep my deceased sister's house or walk away?
Today's question comes from Milwaukee, Wisconsin and the reader writes the following:
“Should I keep my deceased sister's house or walk away?
My sister died in June. She had no will, no children or husband. She left the house with a $25,000 mortgage with the home value of $23,000. The home needs a lot of repairs I don't think I can afford. Last year a huge tree fell in the infamous storm and the grass is overgrown. The attic is full of junk and electricity is not working in the basement. Should I keep this house or walk away?”
So first of all, I'm sorry to hear about your sister passing in this situation with the home. I know in many areas, home values can fluctuate frequently. I would recommend that you get an accurate assessment what the home is worth and you could do that by getting in a certified appraiser. They give you an appraisal or perhaps you go online and look at some property tax assessments or get a realtor to give you an estimate of what they would sell the home for but if you really think the home’s worth less than the mortgage and then you maybe better walking away than receiving the house.
When you inherit a home with a mortgage, you take the property subject to the mortgage. So it means you can take title to the home, but then you become responsible to pay off whatever is loaned because the bank has a secured interest in that real estate.
The other thing here is if your sister left you any other asset in her state of soul, maybe those assets are worth receiving and could help you pay off the mortgage and the house, but if you really think the house is worth less than the mortgage then you may be better off walking away completely, letting the bank deal with trying to get repaid.
So great question and thank you for asking.
© 2020 Burton Law LLC. All Rights Reserved. Transcript and captions provided for ease of access for the hearing impaired. For questions about this topic, or to suggest a topic for a future blog post, please contact the office.