FundRobot » Trust Funds » Is a Will still valid to the beneficiary if the property was charged to bank ?

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Old   #1 (permalink)
 
Posts: 2,600
Default is a will still valid to the beneficiary if the property was charged to bank

My uncle wants to write a Will for a property-house for his son, that house is still under home loan with 10 years loan installment still remaining, the house title deeds, which is my uncle's name, has been charged to the bank for this home loan.



My question is : If my uncle dies within this 10 years, would the property be transferred to his son's name automatically after when the loan is settled after 10 years, would the Will be effective ?

Thank you.
Cash754 is offline   Reply With Quote
Old   #2 (permalink)
 
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Default is a will still valid to the beneficiary if the property was charged to bank

It's not automatic. He can certainly name whomever he wishes as heir(s) in his will. But if he dies and there is still a mortgage loan on the house, that loan will have to be paid off before the title can be transferred to the heir(s). The lender is not going to release it's lien on the title until that happens and without a lien release, there can be no transfer of title. A house with a mortgage is not "owned by the bank" - the bank merely has a title lien.

"The only "automatic" transfer of title occurs when two parties jointly own the house in joint tenancy with right of survivorship. That occurs outside of the will (estate).
CallMeNow is offline   Reply With Quote
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Old   #3 (permalink)
 
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Default is a will still valid to the beneficiary if the property was charged to bank

Your uncle may prepare a will, sign it and the house would pass to the person that he willed the house to. With or without a will, in most states, a property is required, over a certain dollar value to go through probate. A judge would decide the legal heirs according to the laws of the state where the property is. Most likely the desires of the deceased will would be honored.

Even though a will might indicate a person the deceased person would like to have his/her property, this will can be challenged for it's legal validity or question the sanity of the person that wrote and signed it.

A better method of estate planning is to prepare and have a living revocable trust signed by the current owner (your uncle). having a revocable living trust would prevent probate court. You might be able to have tax advantages. No one is able to challenge the trust.

In order to prepare a living trust, you would need to have an estate planner, para-legal or an attorney to prepare the trust. There is a fee for the use of these individuals in engaging their services.

In establishing a living trust the person making the trust would be required to name a person to take care of the trust in the event he/she is mentally or physically unable to. Your uncle is able to name you as this person.

Make sure the person you hire to set this trust up fund the trust. This is very important.

A mortgage lender may not start foreclosure procedures against the heirs of an estate of a deceased person. There is a federal law that was passed, that prevent mortgage lenders (banks) from foreclosing on property of the deceased person. The heirs do not need to refinance the mortgage loan, it could remain in the name of the deceased.

The heir(s) of the house is required to pay the mortgage loan as agreed by the deceased. If the heirs fail to pay the mortgage loan the mortgage lender is then able to foreclose on the property.

I hope this has been of some benefit to you, good luck.

"FIGHT ON"
Mary500 is offline   Reply With Quote
Old   #4 (permalink)
 
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Default is a will still valid to the beneficiary if the property was charged to bank

Ownership of a real property is never "transferred automatically". If your uncle owns something - he can will it to someone- but the probate court does that after death. If money is owed on the item (a car or house or anything else) then that loan has to be paid off or the lender can come repossess the item. In the case of a house it would be foreclosure.
I don't know what you mean by "charged to bank" unless you mean that the mortgage loan has a lien on the house- and that is true with all mortgages.
Sarah69 is offline   Reply With Quote
Old   #5 (permalink)
 
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Default is a will still valid to the beneficiary if the property was charged to bank

No..............if your uncle dies, wills the house to his son and there is still an unpaid mortgage due....the loan MUST be paid off before the son can have the house.
SweetHot is offline   Reply With Quote
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