Quitclaim with mortgage owing

[sarasmoma]

What is the name of your state?What is the name of your state? Michigan

Hi,

I am in the process of being appointed personal rep for my mother's estate. She died intestate. My question is this: My parents bought a house for my brother's family to live in around 1996. My father died in 2001 and my mother quitclaimed the deed to my brother and his wife. At that time they did not qualify for a mortgage so it remained in my mother's name. My mother died earlier this month and I am wondering what will happen now. Because the debt was technically my mother's will the house have to be paid off out of her estate and it will be free and clear for them or will my brother and his wife have to obtain a mortgage and continue the payments? If the house is paid out of the estate would that be paid first and then the estate split 50/50? There are just the two of us left. I have received conflicting info regarding this and want to make sure the info I give my brother is correct.

 

[divgradcurl]

Because the debt was technically my mother's will the house have to be paid off out of her estate and it will be free and clear for them or will my brother and his wife have to obtain a mortgage and continue the payments?

Well, the mortgage has to be paid off, because your mom isn't around to pay it anymore! But that doesn't mean that your brother gets the house free and clear. The general rule is that if the estate is big enough, the mortgage would be paid off from the estate, but the brother's 50% of the estate would be reduced by the amount needed to pay off the house -- in other words, the pay off of the mortgage is part of his inheritance.

Otherwise, if the estate isn't big enough to pay off the brother's mortgage and still leave 50% for you, there are two options -- either pay off the mortgage (if the estate is large enough), and then your brother will owe YOU the difference between 50% of the estate and what you actually got, or your brother will have to take out a mortgage on his house, and use the proceeds from that mortgage to pay off Mom's mortgage, then each of you will get 50% of the estate. That's probably the cleanest way to do things, if your brother can qualify for the mortgage.

Your brother is not entitled to a windfall simply because your Mom died.