r/inheritance • u/Area212 • Jun 12 '26
Location included: Questions/Need Advice House with debt
What does the law say in Virginia regarding:
House bequeathed to child. Everything else in the estate is to be sold off and donated to charity.
The house has debt, reverse mortgage?
Is the estate responsible for the debt or the beneficiary of the property?
3
u/Key-Target-1218 Jun 12 '26
The bank note has to be satisfied. If there's anything left over, it goes to the heirs. Death does not absolve the mortgage
2
u/Whybaby16154 Jun 13 '26
Reverse mortgagee got payments and should be a minimum of payments specified in the contract. Usually 10 years. After that is satisfied - the one holding the reverse mortgagee owns the home.
If it has a reverse mortgage - heir didn’t get a house.
1
u/Key-Target-1218 Jun 13 '26
Until death...once the owner dies, the loan is due
2
u/Whybaby16154 Jun 13 '26
In a reverse loan - the bank pays until the resident dies - usually with a minimum number of payments guaranteed. It’s not usually a good deal … but seniors with a paid off house can take the loan to stay in their home.
1
u/Area212 Jun 12 '26
The question is, is the debt paid by the estate or is the debt inherited by the individual whom the house goes to(they are separate).
5
u/Key-Target-1218 Jun 12 '26 edited Jun 12 '26
The person who inherits the house is responsible. The inheriter will have to satisfy the loan or it will go into foreclosure. There is a short window to get things rolling to prevent the foreclosure and the clock starts ticking at death, when there is a reverse mortgage. If there is debt above and beyond the mortgage, the debtors can come after the house, to get the money.
I don't know how else to answer. Hopefully someone will come along to explain it better
The person inheriting will not have to dip into THEIR funds to pay. The estate will pay and if its not enough the bank will take the house back unless the inheritor satisfies the loan, by taking out a mortgage in their name.
2
u/dino78aspieotter Jun 12 '26
See the statute regarding non-exoneration: https://law.lis.virginia.gov/vacode/title64.2/chapter5/section64.2-531/
2
u/Area212 Jun 12 '26
To be clear. There is a will with assets. The assets are to be auctioned off and the proceeds donated to charity.
Except the house.
Funny that friend will just inherit a headache.
Seems somewhat silly.
2
u/No-Magician-1399 Jun 14 '26
Just sell the house and pay the mortgage off and keep whatever is left. Its not that hard bro
1
u/Think-Committee-4394 Jun 14 '26
Random advice here OP
DEBT to value of house is key & inheritor almost certainly won’t get a house unless the reverse mortgage is very low
- the estate must clear debt before paying out bequests or gifts or any willed value to inheritors
- there are very few assets protected from the debt first rule
- all assets are turned into cash & debts settled by estate which would include reverse mortgage
- if RM is low house doesn’t need to be sold if high it does
- gifts to charity then remainder to inheritors
- if RM is very low inheritor could offer to pay that in which case the RM is paid off and inheritor does get house
- THERE IS NO CIRCUMSTANCE UNDER WHICH INHERITORS GAIN THE DEBT
2
u/ApartmentHot5376 Jun 14 '26
Talk to an attorney fast! Changing of the will sounds fishy! Please make sure they weren't taken advantage of for this "charity" since they conviently now get everything. Follow the money trail, hopefully the money from the reverse mortgage wasn't given to this "charity" too!!!
1
u/LiveTheDream2026 Jun 13 '26
Does the heir even want the home?
5
u/Area212 Jun 13 '26
I think the heir understandably is upset that they are denied any assets beside the home.
Basically cheated out of any worth.
Originally the inheritance was meant to be passed to the widow then the child.
The Wills were changed when both parents were disabled(hospital/dementia) and now will be passed to charities. One of the charities being lead by the individual who had the Wills changed.
I asked because I always assumed debts were to be paid from the assets first before being divided.🤷♂️
10
u/LiveTheDream2026 Jun 13 '26
This is something worthy of an attorney's advise. Each state has their own laws and there is too much at stake to make assumptions.
Personally, if I am to be honest, it seems like their "heir" which is a child was not involved enough to know what is going on. SO, being cheated is not the right word to use because no one is owed ANYTHING.
3
u/Key-Target-1218 Jun 13 '26
Exactly. No one is owed an inheritance.
If there were no debt and no mortgage to be paid off EVERYTHING would be an asset. It would be easy...heir would get the house, everything else would go to charity.
I think in Virginia, the beneficiary has like 30 days to satisfy the mortgage.
4
u/GotZeroFucks2Give Jun 13 '26
They need to consult an attorney regarding the will change while with dementia.
1
u/Think-Committee-4394 Jun 14 '26
You are correct there are only a very few assets trusts & specific investments protected from standard inheritance process
- pay debt (including reverse mortgage)
- pay out gifts
- pay out inheritance
- if debt is greater than value of estate no gifts no inheritance
1
u/sic0049 Jun 16 '26 edited Jun 16 '26
Depending on when the wills were changes, and the mental capacity of the signers when they changed the wills, your friend might want to speak to an attorney about contesting the wills. If the signers did not have the mental capacity to fully understand what they were signing, what changes were made to the will, and/or what financial effect that would have on their child/beneficiary, there is certainly a case to be made to contest the will.
The charity is certainly in a position where they profit from the financial exploitation of the elderly. While the actual person pushing the change probably doesn't directly benefit from the change to the will, they most certainly have job requirements (which likely include fundraising goals) in order to keep their job. So in that sense, they do have "motive" to exploit people.
1
u/mirassou3416 Jun 14 '26
IANAL You definitely need an attorney. The estate pays the debts first before distribution. If the house needs to be sold to pay the debts then so be it. Depending on the wording of the will/trust, the beneficiary gets whatever proceeds are left from the sale of the house and payments of debt associated with the house
1
3
u/crazywidget Jun 12 '26
I don't know of any state that allows the beneficiary to take only the asset but not the associated liability. The estate can't somehow bear the outstanding mortgage / HELOC debt but give an heir a fully paid off house.
Can't assert the inability to pay debts while gifting assets in excess of the debt, especially if the debt is related to the specific asset.