NSW Supreme Court Inheritance Concerns
Apparently your debts don’t die with you, someone has to pay.
An Estate case in the Supreme Court saw a beneficiary deemed liable for a mortgage on a gifted property, despite a specific intention for outstanding debt to be settled from the residual state of the benefactor, according to Townsends Business & Corporate Lawyers.
If you are gifted a property in an inheritance and the residual monies of the estate do not cover the mortgage on that property, be aware that the beneficiary will be liable for the debt.
Winn v Harding [NSW] case – Karen Winn’s Estate did not have sufficient funds to pay out Bankwest for the repayments on a mortgage at her death. Harding inherited the property from Winn, however concern was raised over if the property was liable for repayments.
“Money from the general pool of assets contained within someone’s estate will not automatically assist to pay out a mortgaged property upon their death,”
An old English legal principal is mirrored in Australia that you may inherit a property, however you must be in a financial position to pay out the remainder of the mortgage.