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New Jersey estate planning: Dealing with a home and mortgage

On Behalf of | Apr 29, 2013 | Estate Planning |

Many adult children in New Jersey may realize that if their parents die owning a home, it is possible there will be a mortgage on that home. How the home and mortgage are dealt with after death should be a topic of discussion when the parents are doing their estate planning. There are several ways that the home can be passed on after death.

Most estate plans strive to avoid probate if possible. Having to go through probate can be time consuming and costly for those left behind. Larger assets such as a house will not be titled to the heirs until the probate is concluded, and that could take months or even years depending on the circumstances.

There are several types of trusts in New Jersey that the home could be put into that would allow the parents to retain ownership of the home, live in the home until their death, and then immediately pass on once they are deceased. Some parents may decide to sell or deed their house to their children while they are still alive with the agreement that the parents will live in the house until they die. There is an element of risk to this since some children may kick their parents out of the house in order to sell it or move in themselves. In addition, if that child is sued for any reason, the house could end up being seized.

Deciding what to do with assets such as a house after death can be an uncomfortable conversation to have, but it is a necessary one. Estate planning can not only put the planners’ minds at ease, but may also end up saving heirs additional costs. If it is possible to keep a house out of probate, it may be worth having a conversation that everyone would prefer not to have.

Source:, “What happens to your mortgage when you die?” April 18, 2013