Legal Question in Wills and Trusts in California
My husband's mother passed away and left her CA house to him and his sister. However, neither party wants the house. The mortgage is almost what the house is worth, and combined with lawyer fees, closing costs and money we are paying out of the (small) estate each month until it sells, we would end up in the red.
Right now the house is still in the estate, but my husband think he needs to switch it to his (and his sister's) names in order to sell. I'm afraid that if he does so, we (rather than the estate) will be personally responsible for all expenses, we will owe money we don't have, and it may negatively affect our credit. So I have a few questions:
1) Can we (as executor) sell the property without putting it into our names?
2) Can we just walk away from the property (and the mortgage) without it affecting our personal credit?
3) What should we do???
4 Answers from Attorneys
1. Yes.
2. Yes.
3. Contact a local attorney for specific advice.
Has a probate been opened? If the gross fair market value of the house as appraised by a probate referee is over $100,000 then you need to open a probate. Even if the value is not that high, you still may want to open probate for creditor protection. Your husband will not be able to sell the house without filing something with the court.
You can sell the house as an executor if probate has been opened, and have been issued letters testamentary by the court. In that situation, it would be better to sell from the estate, rather than transfer to you to sell, after distribution.
On the other hand, if you just let it go, the lender will most likely foreclose. Any foreclosure would affect the estate, and not you.
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