Is mortgage on home forgiven when someone dies?


Is mortgage on home forgiven when someone dies? The home was in one spouse's name only. What are surviving spouse's rights to the home when the other spouse dies? How does the elective share affect the home when one spouse dies? Watch as Attorney Tom Olsen answers these questions and more! 


TJ: My mother passed away a little while ago. It’s just me and my father. I’m an only child; there are no other siblings. The only thing she owned was her home and it has a mortgage on it.   Does the home automatically go to my father or will it go through probate? 

Attorney Tom Olsen:  TJ, there is nothing automatic about the probate process. It is going to require a probate process to get this home out of your mom’s name and into your dad’s and your name. Did you mother have a will?

TJ: It was an unforeseen death. There was no will.

Attorney Tom Olsen: This is a home that she and your father lived in, therefore the Florida statute is going to write her will for her and it says that your father will get a life estate in the home. He will get to live there for the rest of his life and upon his death it would go to you.  As an alternative, your father could elect the right to own the home as a tenant in common with you. You would both own it together as tenants in common. Your dad has a couple of choices here. But either way, the ownership in this property is going to end up in both of your names after the probate is done. 

TJ: Will the mortgage still be a lien on the house even though she’s died? 

Attorney Tom Olsen:  Yes, it is still a lien against the property and when you and your dad inherit this property you will inherit it subject to the mortgage lien.

Attorney Tom Olsen: TJ’s father would have to make a strategic decision. One decision would be, "I want to have a life estate in this home. I want to be able to live here for the rest of my life. No ifs, ands or buts." The other strategic decision would be, "I want to own it as tenant in common with my son. I own 50%, he owns 50%." And the advantage of that is that the father could force to sale of the property and we know how much he would be entitled to, which would be 50% of the net proceeds. 

Chrissy: He wouldn’t have to do this if they had owned the home as husband wife.

Attorney Tom Olsen:  That’s right. Most married couples own their home jointly, but in this case mom died with the home in her name only and no will. 

Attorney Tom Olsen: And without calling Attorney Tom Olsen before it was too late to get her lady bird deed to avoid probate on her home.

Chrissy: Yes, yes, because we know that lady bird deed is a really, really great tool to avoid probate on real estate.