If named in a will, must debt be accepted?

[Lot249]

New Jersey
If you are named in a will and are left a property, are you obligated to accept and assume ownership?
Can a will actually mandate someone to accept a debt?

 

[PayrollHRGuy]

No. Debt of an estate should be cleared prior to the assets of the estate being transferred.

Example, Let's say the property of an estate is valued at $100K and $50K is owed the property. The estate could either sell the land, pay the loan and then distribute the remainder of the cash as directed by the will or law or the property and debt could be transferred per the will/law. But in either case, the person who was receiving from the estate could disclaim the inheritance.

This is very oversimplified but should give you an idea.

 

[Lot249]

You've confirmed what I thought, no one is obligated (by law) to accept any inheritance.
Thanks so much for the quick response.

 

[LdiJ]

You've confirmed what I thought, no one is obligated (by law) to accept any inheritance.
Thanks so much for the quick response.

You've confirmed what I thought, no one is obligated (by law) to accept any inheritance.
Thanks so much for the quick response.

I disagree a bit with the previous response. Generally if there is debt associated with a property it stays with that property if the property itself was left to a specific person.

Now, many heirs would choose to sell the asset, pay off the mortgage/balance due and then retain the equity for their own use. It would be a bit foolish not to do so.

However yes, its also possible to disclaim an inheritance altogether. A friend of mom disclaimed her mother's entire estate as nothing was worth trying to save. She was upside down on both her house and car.

 

[Taxing Matters]

I disagree a bit with the previous response. Generally if there is debt associated with a property it stays with that property if the property itself was left to a specific person.

That is highly dependent on (1) how the will (if there is one) is written and (2) how the applicable state law allocates the debts and expenses of the estate to the various bequests in the will. State laws do vary on how that allocation is done. It is not always the case that when a home has a mortgage on it that the beneficiary receiving the home must bear all the cost of that mortgage out of his/her share of the estate.

 

[justalayman]

To restate what taxing matters has said;


In some states the laws are written such that the debt on the home would be paid by the estate prior to transferring it to the devisee. If the debt against the home cannot be paid with estate assets, the named devisee could elect to acccept the property with the debt intact or refuse the property entirely.


In other states, the laws do not require the estate to pay the debt. If so, it would play out with the devisee accepting the property with the debt attached or denying the transfer.


The testator can write into their will that the debt be paid or not.


And nobody is required to accept anything from an estate. You can just say no if you prefer.