If my mom has a paid off condo and a revocable Trust leaving it to me, when she takes out a home equity loan on her death does it does roll over to me or do I have to pay it in full?
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If my mom has a paid off condo and a revocable Trust leaving it to me, when she takes out a home equity loan on her death does it does roll over to me or do I have to pay it in full?
The loan will be for $30,000 and is to be paid back over 30 years; her condo is worth $60,000.
Asked on May 25, 2014 under Estate Planning, Nevada
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
It may very well be that your Mother may have to take the property out of the trust to take out the home equity loan. The bank may not lend to her or allow it to be placed in the trust. Check that out first. If they do allow it then you need to see the terms and what they require - acceleration of the loan on death, etc. Generally if the property passes through probate or intestacy the acceleration clause is void and you can keep paying it off even if not in your name. But it gets a little complicated with a trust. Good luck.
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
Unless you personally sign the loan for the condominium that you have written about, you are not personally respoinsible for it. However, if you take title to the unit, you take title subject to the loan where essentially if you want the unit, then you have to service its debt loan, sell the unit of refinance the loan.
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