Full question:
My parents never wanted to have a will. My father passed away last month and now my mother wants to have my youngest sibling to be the sole heir of their property which consists of 80 acres zoned Exclusive Farm Use which is my parents house and the house my youngest sibling lives in with her family. My mother seems to think that all of this will be free to the sibling. We are concerned that there will be costs and that will be the responsibility of the heir and that she will not be able to pay them. What happens if the heir doesn't pay the property taxes or other costs? At one time the property was fully owned by my parents, but it's possible that they have since taken out a loan with the property as collateral. My mother also will not divulge if she owes anything on the house, but my sister has no income to speak of. Will a lein against the property be her responsibility? Is it better to put all this into a Living Trust or a regular Will? What is other siblings contest it?
- Category: Real Property
- Subcategory: Deeds
- Date:
- State: Oregon
Answer:
A deceased's debts should be paid with the property in their estate (the property left at their death). Children don't inherit their parent's debts unless they created a co-signor/guarantor/surety/joint account relationship to the debt, so that the child's name is on the debt also, and it isn't a separate debt. Spouses will generally only be liable for a separate debt of the deceased if they live in a community proerty state. However, state laws vary about which marriage partner is responsible for certain debts, depending upon when the debt was incurred, the identity of the debtor, or the purpose of the debt.
Only after the debts are paid will the remaining assets be distributed among the beneficiaries of the will. Be advised that when a child inherits property that is collateral for a debt -- for example, a car that is not paid for or a house with a mortgage -- the debt comes with the property. If there is insufficient money or assets to pay all creditors, then the estate must be divided up as equally as possible, with secured creditors receiving priority. This means that if the deceased parent died with little or no money in their accounts and didn't own a home, unsecured debt, such as credit card debt will not be paid to the creditors. There are companies that will insure the borrower, life insurance that pays off the mortgage. Please see the information at the following links:
http://definitions.uslegal.com/g/gift-tax/
http://definitions.uslegal.com/i/inheritance-tax/
http://www.irs.gov/faqs/faq4-7.html
http://wills-probate.lawyers.com/Transferring-Property-Outside-Probate.html
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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.
