South Haven, MI asked in Estate Planning and Elder Law for Wisconsin

Q: I had a land contract with my mother so she could stay in her house, However, she passed away before I took out a loan

In her will it states how much I paid towards the HP/escrow(x) throughout the years. It also states If any remaining mortgages & property expenses due (Y)and owing on my residences exceed the amount of kelly's purchase price after the credit is given. then her purchase price shall be increased in my amount necessary to pay off any mortgages and property expenses as well as any estate expenses. (i don't care about this) X and Y is more than the house is worth. I want to sell the house, pay off x and then keep my part of the equity(Y) This amount will be less than what i put into the payments over the years Can credit card companies come after my moms estate and take away from me getting my equity of the house ? She doesn't have any other money. I have the land contract paperwork /payments made to the mortgage company. Just wondering if unsecured debt can take away from secured debt(my equity)?

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1 Lawyer Answer
Kenneth V Zichi
Kenneth V Zichi
  • Estate Planning Lawyer
  • Fowlerville, MI

A: Well, this is quite the pickle.

If I understand correctly you have a land contract where you are BUYING your mother's house for x dollars, but there is a mortgage against it in your mother's name for y dollars. The question is not whether X plus Y > value of the house. It is whether or not X>Y. If you owe your mom's estate MORE than the mortgage amount, then you should be able to simply pay off the land contract, (which will first and foremost pay the bank mortgage off) and whatever is left over after the mortgage release, gets put into the 'pot' of your mother's estate and that money is used to pay your mom's other debts such as credit card bills, etc. You keep the house.

If YOU owe less on the land contract than your mother did on the mortgage, then you have issues.

The bottom line however, is you need to insure the paperwork tracks properly so the creditors can't come after you ... it sounds like your mom's estate was PROBABLY set up in a way you can accomplish this, but without seeing the paperwork we're shooting in the dark and can't provide any real insight or guidance. You need an attorney who is familiar both with real estate law and with Probate law to guide you through this process. Gather up all the documents (mortgage, land contract, probate documents, will etc.) and seek local legal counsel in the location where the probate is proceeding (where your mother lived at the time she passed) and ALSO with an attorney in the location where your house is located (if not the same place) so you can get some real advice!

--This answer is offered for informational purposes only and does not constitute legal advice or create an attorney/client relationship. I am licensed to practice in Michigan only. Please seek competent local legal help if you feel you need legal advice!

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