Q: My stepfather left me his home in his will, was told I will have to sell to pay off debt but I want to keep to live in.
We live in Florida. I have lived and been a caregiver for my stepfather since my moms passing 15 years ago, he raised me but never adopted. He and my mom have a child together, my sibling and I are close and we are both executors. In the will he left me the home so I could continue to live here, he does have a reverse mortgage on it which we are aware needs to be paid off however I have been told that I will be forced to sell the home and use any leftover funds (after reverse mortgage is paid) to pay off estate debt(credit cards, medical bills, etc). The only option to keep it would be to disclaim the home to my sibling, As he is a true “heir” and protected by homestead so does not have to sell and pay off debt, just pay off reverse mortgage. We are fixing to start probate, just wanting to know is this true? Seems like if he left me the home in his will it should be signed over to me and just be my responsibility to take care of reverse mortgage (which is only 50% of property value).
A: Does the Will say the homestead MUST be sold? If not, then there is no mandate to sell the property to pay off other debts. It's unclear if the advice you've received is from an attorney - either way, I'd seek another qualified opinion.
The issue here is that you are not an heir at law, and the homestead exemption as the property passes through the estate does not pass to you as a non-heir. Typically, the court still signs a homestead order, but it states that the property is non-exempt homestead and subject to administration.
Once a real property is deemed to be subject to administration, then it is subject to the creditors of the estate. If it was only subject to the reverse mortgage (i.e. if it had been left to a heir at law), then the homestead order would distribute the home to the heir at law, subject to the reverse mortgage, and the heir would have to refinance after the property was distributed to them via the homestead order. This is likely what would occur if you were to disclaim the property.
If you do not disclaim the property, then it is correct that the property is subject to claims and would then need to be sold in the estate, and at the time of sale, the mortgage and the debts would be paid, and the balance remaining distributed to whomever are the named residuary beneficiaries under the will.
This happens whenever someone who is not an heir at law is left a homestead property in a will; it just does not have these consequences of a sale inside the estate if there are no creditors.
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