Asked in Probate for North Carolina

Q: My dad passed with mortgage on house in NC. We can't afford/don't want it. Can the mortg co come after POD account

The house is probably only worth what's owed on the mortgage due to slow and flooded real estate market. The rest of the estate consists of a high mileage 2007 vehicle worth about $3k, a utility trailer $200,and household goods/clothing around $500 (yard sale price) and a possible refund from a cc purchase that was cancelled of approx $7,620. According to what I read on line POD, TOD, life ins and a few other items are exempt due to assigned beneficiaries. We (my siblings and I) do not live in NC. and want to let the house go into foreclosure. Can the mortgage company come after the POD/TOD accounts? Can I do the small estate to close out everything else & sale/donate the household goods, van & trailer? If so can I do it myself or do I HAVE TO hire an attorney in NC? I'm getting conflicting info on all the above. Thank you for your help.

Related Topics:
1 Lawyer Answer
Sara W. Harrington
Sara W. Harrington
  • Probate Lawyer
  • Carrboro, NC
  • Licensed in North Carolina

A: In order to open an estate, even for a small estate, if the personal representative of the estate does not live in North Carolina, you will need a resident process agent. That can be a trusted friend, but most often it's an attorney.

Regarding the house, I recommend you get an experienced realtor to give you a market analysis. It might be worth more than you think and you would be throwing away money. If it is indeed not worth more than what is owed, you can contact the mortgage lender and see if they will allow the estate to sign a "deed in lieu of foreclosure." If they agree, that's cheaper and faster for them and you won't have to worry about the foreclosure notice being in the paper or the estate getting notices of every step of the foreclosure process. Real estate in North Carolina becomes property of the heirs upon death. It is only brought into the estate if it's needed to pay off debts.

If the house is foreclosed and there is a deficiency between what the house sells for and the debt, the mortgage company could conceivably go after the estate. But it cannot touch the financial accounts and life insurance that passed to you and the other beneficiaries. Those pass outside the estate as well.

It looks like you could file an Affidavit for Collection for the rest of the assets, which is quicker than a full estate.

You do not have to hire an attorney to handle this, but I would recommend you do.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.