If a parent dies and owns a home but has loans against it, who is responsible for those loans?
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If a parent dies and owns a home but has loans against it, who is responsible for those loans?
Asked on June 5, 2014 under Estate Planning, Pennsylvania
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
If there is another owner of the home (e.g. a suriving spouse), that person would be responsible. If there is no surviving other owner, then the loans would have to be paid by anyone who inherits the home, if they want to actually get/keep the home (if the loans aren't paid, the home may be foreclosed upon). However, no one may be forced to inherit--if it's not worth paying the loans (e.g. the home is underwater on its mortgage), a beneficiary can just refuse to accept the home, in which case the bank or other lender will most likely unlimately end up getting it.
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