Bequeathing property in the state of Washington can be a kind gift for a loved one after you are gone. However, inheriting a home or another parcel can come with complications. If the property has a mortgage, your benefactors must take responsibility for the payments.
A mortgage with a co-signer
People often enter a mortgage with a spouse or another co-signer. When one party dies, the other remains responsible for the payments. As you consider your estate, you will want to make allowances that keep this expense from becoming a burden.
Your executor and your mortgage
Depending on its complexity, the estate administration and probate process can take some time, and mortgage payments must continue while it is resolved. Your executor is responsible for making regular payments from your estate during this period.
When there are sufficient funds in your estate, continuing payments is a straightforward process. However, if there is not enough money, the estate may need to liquidate assets to continue payments. This process may involve selling the property or allowing the lender to foreclose.
Inheriting a mortgage
If you are on the receiving end of an estate, you must deal with similar issues. Once you take possession of the property, you are also responsible for paying the mortgage. Failing to make on-time payments will result in foreclosure.
You will want to reach out to the lender to make a formal transfer of the mortgage. Because of the unusual circumstances, a lender might be willing to work with you to refinance the mortgage to make it more affordable.
Planning for the future responsibly
It is always best to communicate your wishes clearly to your loved ones before you die. A property can be a meaningful inheritance, but it can also become an unexpected financial responsibility.