Q: Curious if I am a Beneficiary and receiving home with small Mortgage through a Trust will I be Responsible for
Her Unsecured Debt after She dies when I receive the Home?
A:
I am assuming you understand that secured debts are those debts that are not attached to something that the bank/creditor can repossess and unsecured debts are debts such as credit cards, personal loans, etc. where there is nothing physical that the creditor can reclaim if the debt is in default.
Whoever the trustee is will be responsible for paying the debts. If there is enough money left in the estate to satisfy the unsecured debt then the trustee can pay those debts with the other assets and convey title to you as the beneficiary named in the trust. If you are not the trustee, then you legally have no obligation towards the unsecured debts of your grandmother. However, if the estate does not have assets sufficient to pay the unsecured debt, the trustee can and will have to sell the home or take out another loan to satisfy those debts prior to conveying it to you or they could approach you to pay the unsecured debt prior to conveying title the house to you. You as the beneficiary have no legal obligation to do so but, but all legitimate debts must be paid prior to the distribution of the estate.
I hope this helps.
Wes
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