Inherited Debt and Property
In the previous post, we discussed an important issue that might face many couples as they approach divorce: What happens to inherited property?
According to property division lawyers in Phoenix, Arizona law provides a clear-cut answer. Inherited assets are considered to be separate property, no matter when ownership is transferred. However, there is another side to inheritance: debt.
Certain things in life can’t be predicted, so a person might pass away with a major sum of mortgage debt. If this happens, beneficiaries could be handed the responsibility of the mortgage in addition to the residential real estate.
According to a report from SFGate.com, mortgage lenders may have the ability to demand mortgage repayment as soon as the property is transferred. In other words, beneficiaries may be required to pay a large bill immediately after an estate is executed.
Where Does Divorce Come Into Play?
In order to satisfy the mortgage lenders needs, a person may need to use funds from their own marital income or assets. As a result, the individual’s spouse might have a stake in the home after contributing to the mortgage repayment. As a result, any equity in the home might be considered marital property and, thus, would be subject to equal division.
This is a really complex situation that a divorcing couple may unwittingly find themselves in. Of course, this is not the only scenario in which property division becomes a serious challenge. Handling property appropriately is essential to a successful divorce settlement. After all, no one wants to worry about a legal dispute arising after they believe all is said and done.
SFGate.com, “Can You Inherit a House That Isn’t Paid For?” Tony Guerra, accessed July 3, 2014
Daniel Beeks
Dan Beeks has been an attorney in Arizona for over 30 years. He spent many years practicing with prestigious mid-sized and large law firms in Phoenix, specializing in commercial litigation. Dan began practicing family law when he and his former partners were frequently retained by other family law attorneys to represent family-owned businesses in connection with high net-worth divorces.
