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Wills and Estates
Testator asks about payment of mortgage from residue of estate.

Testator asks about payment of mortgage from residue of estate.

Q: What is it called when you get something from a will?

When you receive something from a will, it is called a bequest. A bequest can include money, property, or other assets that the deceased has designated to be given to a specific person or entity in their will.

Q: What happens if my beneficiary is under 18?

If your beneficiary is under 18, their inheritance will typically be managed by a guardian or held in a trust until they reach adulthood. The guardian is responsible for managing the assets and ensuring they are used for the beneficiary's benefit until they are legally able to handle the inheritance themselves.

Q: What are the requirements for a will to be valid in Texas?

In Texas, a will must be in writing, signed by the testator (the person making the will), and witnessed by at least two credible witnesses who are at least 14 years old. The will must also reflect the testator's intent to distribute their assets upon death. If these requirements are met, the will is generally considered valid.

Full question:

I purchased an estate package including the will for new parents with minor children (TX-P006-PKG). The will includes a statement which requires initials if I want it to apply that states as follows: "Any and all debts of my estate shall first be paid from my residuary estate. Any debts on any real property left herein shall be assumed by the person to receive such real property and not paid by my Personal Representative." I understand that the will has a clause for my homestead and primary residence and another clause for my residuary estate. If I and my wife are deceased, the residence is processed under the residuary clause and the residuary estate is bequeathed to my children. I am not clear on what this language means and whether I should initial it. Please advise.

Category: Wills and Estates
Date: 04/07/2025
State: Texas

Answer:

As a general rule in Texas and other states, a bequest or devise of encumbered property ( that is property such as a residence that is "encumbered" by a mortgage that secures payment of a loan agreement) does not obligate the personal representative of the decedent's estate to pay the indebtedness secured by the mortgage upon the residence. Generally, therefore, the personal representative simply gives the devisee a personal representative's deed to the residence which remains subject to the mortgage indebtedness. The devisee then must make the mortgage payments when due or lose the property. If the testator (the maker of the will) doesn't check the optional paragraph in Article 15, directing the PR to pay all debts of the estate from the residuary estate, then the devisee of the residence will take the property subject to the mortgage. If, however, the maker of the will checks the optional paragraph, then the PR will be obligated to pay all debts of the estate including the mortgage indebtedness from the residuary estate.

BUT, the residuary estate may not be great enough to pay all the estate's debts, and requiring the mortgage indebtedness may require the PR to sell all the assets of the estate including the residence in order to pay of all the estate's indebtedness. That is why the "pay all debts from the residue of the estate" provision is an optional provision. It may require liquidation (that is SALE) of all the estate's assets. Generally, the optional provision directing the PR to pay all debts from the residue of the estate works only when the mortgage indebtedness is relatively small in relation to the total value of the estate.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What happens when a minor gets an inheritance?

When a minor inherits property or money, the inheritance is typically held in a trust or managed by a guardian until the minor reaches adulthood. In Texas, a court may appoint a guardian to manage the inheritance on behalf of the minor, ensuring it is used for their benefit. This protects the minor's interests until they are legally able to manage the assets themselves.

What happens when a minor child inherits an estate?

If a minor child inherits an estate, the assets are usually placed under the control of a guardian or a trust until the child turns 18. The guardian is responsible for managing the assets and making decisions that are in the best interest of the minor. This ensures that the inheritance is preserved and used appropriately until the child is of legal age.

What is it called when you get something from a will?

What happens if my beneficiary is under 18?

What are the requirements for a will to be valid in Texas?

What restrictions are placed on a minor who is the beneficiary of an estate?

Minors who are beneficiaries of an estate face restrictions in that they cannot directly manage or access their inheritance until they reach the age of majority, which is 18 in Texas. Their inheritance is typically managed by a guardian or held in a trust to ensure it is used for their benefit until they are legally able to control it.