Legal Question in Wills and Trusts in California

I have a question regarding inheritance. My parents in law have a rental home that they bought for $30,000 long time ago. Then they took out equity and owe about $330,000 on that house right now. The rental house is worth about $270,000. They also have their primary home that is about $100,000 underwater as well. They also have about $30,000 on their 401K. When they pass away, what will happen to their houses. Will we have to accept their houses and their mortgage? Or will their houses be sold to pay some of the mortgages they owe on those houses? What will happen to their 401K money, will it be used to pay off mortgage? Will estate have to pay capital gain tax on the rental house, but there is no money to pay capital gain tax? If we desclaim the inheritance, what will happen to the furnitire in their house and their 401K? Can you desclaim only houses and inherit 401K?


Asked on 8/07/12, 10:12 am

2 Answers from Attorneys
Kurt Seidler Law Offices of Kurt A. Seidler APC

If I were you I would have them name me as beneficiary on their 401k, and just plan on seeing what the two properties are worth when they are gone. You personally are not liable for these mortgages. If no one is ever appointed executor the lenders will simply have to do what they need to do to foreclose and it isn't your problem.

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Answered on 8/07/12, 10:21 am
Anthony Roach Law Office of Anthony A. Roach

You're not personally liable on the notes, which are most likely secured by deeds of trust, and not mortgages. (There's a difference, and any attorney who tells you there is no difference is setting you up for a fall.) The properties will always be subject to the recorded deeds of trust, so if it is not paid, it will be foreclosed.

Personally, I think you are speculating about what will happen in the future too much. I don't have a crystal ball.

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Answered on 8/07/12, 10:26 am


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