Q: Refinance Title Issues in Relation to Estate Planning
This last week my wife and I refinanced our home. The home has closed and we missed the three day right of cancelation. In all, things are good as our refinance saved 10 years and 2% on the rate, but there is a problem. My name is not on the title and it is only my wife's as a married woman; she has the only income. There is a clause in the paperwork that can make the mortgage due immediately if my name is added by a Quit Claim.
We do not have a will and my name is not on the title or the mortgage. Yes, we obviously should have canceled the mortgage, but we were a bit naïve in our understanding of the process. So, now we are worried. Obviously, if I die then there are no problems, but what if my wife passes. We do not have the same name and I am not even listed as tenant in common or tenant by the entirety. What do we do?
My wife is worried because she is afraid if she dies that the home will go to probate and then the mortgage company will try and close on the home.
A: You have a very legitimate concern, and the lender should not have documented the loan this way, but that is water under the bridge. You can create a new deed from your wife to both of you. Under federal law, the lender will NOT have the right or ability to call the loan due as a result of that transfer. You should have this deed prepared by an attorney to make sure it is done right. This stakes are too high for you to try to save a few dollars by doing this yourself.
And while you are at it, you really should take care of getting your wills created. A complete estate plan would include many other documents. Let this be a wake up call that you need to take care of ensuring you have all of the legal documents in place to ensure a smooth transition when either of you dies or becomes disabled and also at the second death.
Anthony M. Avery agrees with this answer
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