Legal Question in Wills and Trusts in Alabama
Can debt be willed forward?
Mom has a reverse mortgage on her house. Assume she takes/spends all of the equity available on the loan, then lives on N years afterward with interest accumulating, then dies. The subsequent sale of the home does not cover the loan + interest, nor does the sale of the remaining household assets make up the difference. In other words, her ''estate'' is a debt. I am the beneficiary of her will. Am I liable for her debt(s)?
She currently receives outside income from several irrevocable trusts which will be transferred to me upon her death. I assume her estate will have to go through probate. I've been told the trusts are like a firewall and can't be touched. While I knew her house would have to be sold in order to pay off the reverse mortgage, I've only recently come to realize that it could end up in a negative balance.
Thanks so much,
1 Answer from Attorneys
Re: Can debt be willed forward?
You are not personally liable for her debts. Only her estate is liable. The trusts might not be considered part of her estate, so you may not have to use the assets or income of the trust to pay her debts, but the trust documents will have to be reviewed in order to determine whether they bypass her estate.
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