Legal Question in Wills and Trusts in Georgia

Life Estate and credit card debt

My mother is leaving me her home (subject to current mortgage). She has more credit card debt than cash assets. Will I have to sell the house to pay debts. There is just enough equity to cover any debts, but I don't want to refinance and be stuck with high mortgage payment. Credit card debt is around $20,000. If she leaves me a life estate, will I have to sell to pay debts. I am executrix of her will. If she deeds the house to me outside of the will, can the sale be set aside. When should the deed be recorded.


Asked on 11/07/07, 11:47 pm

1 Answer from Attorneys
Robert Thompson J. Robert Thompson Attorney

Re: Life Estate and credit card debt

The house will have to be sold to satisfy her debts, IF her other assets are insufficient to pay them. It does not matter whether she leaves you the whole interest or a life estate--payment of a decedent's debts is a duty of the executor, and if you distribute the house without paying the debts, you become personally liable for them.

A gift of the house during her life might be set aside as a fraudulent conveyance, if she is rendered insolvent and has no other means of paying her debts (unless you can establish that assuming the mortgage is adequate consideration).

If she makes a gift of the house, subject to the mortgage, the sooner the deed is recorded the better.

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Answered on 11/08/07, 6:38 pm


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