How can I make sure my heir gets my house when the bank is the beneficiary on my deed of trust?

Answer 1

Take out some life insurance to cover the remaining principle of the morgage. The bank would rather have the money.

Answer 2

The deed of trust protects the bank's interest as long as there's a mortgage in place. You leave the property to your heir in your will in the normal manner. It would be wise to have enough life insurance to pay off the mortgage if anything happens to you although that isn't strictly necessary if your heir has enough funds to at least make the payments themselves when you pass.

When you pass, the only thing that the bank cares about is getting their money for the mortgage. If you provided enough life insurance it would be paid off and your heir would get it free and clear. If you did not, your heir could either make the payments themselves (banks never invoke due on sale clauses on transfers through inheritance) or sell the property and pay off the mortgage from the proceeds. In that case, they'd keep whatever equity wax in the home.

Answer 3

Life insurance.... yes. A clear cut will... yes.

Look into a living trust. I you can do it and set it up right it can be a big help. This means you retain all rights to the house but upon your death then it reverts to your heir. This can save a lot of red tape and taxes later.

While we are here make sure you have all of your power of attorneys. Should you become incapacitated or pass it will make it easier for somebody to deal w. banks, mortgage companies, insurance, courts and all sorts of things.

Make sure you have all of your documents in one place. Social security documents, mortgage, birth/marriage certificates, will, bank account and investment numbers and addresses, credit card info and anything that you can think of. So if something happens...... even if it is just the hospital everything is there. I included a little light hearted note...... so when that person has to access my stuff for any reason and they are thinking "this sucks" they can get a little cheer.

Good for you to be thinking of this now as so many people don't.

Answer 4

Well, first, you need a will.

Second, you need to have enough life insurance to pay off the mortgage in full if you die, or if your heir cannot make the payments, the bank still has the right to foreclose against the home...will or not.

Answer 5

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