I don’t plan to pass anytime soon; however, I’m at an age where I need to get my finances in order.
I have only one child. The only real asset I have is my apartment, which I still have as a mortgage. I am curious what will happen to my apartment after I pass away as it concerns my daughter.
My daughter does not have any legal obligations regarding my apartment. She is not a co-owner, nor a deed, mortgage, etc. I am worried that my daughter will have no way of maintaining my apartment until it is sold, if I did. passed away.
What exactly do I have to do to make sure she can sell the apartment and secure the proceeds? Can a will protect her? Do I have to put her name on the mortgage?
If I were to sell my apartment today or tomorrow, considering the upgrades I’ve made and the location of the apartment, I’m sure I could make $70,000 to $80,000 in net worth. This property is in Illinois, and I was able to purchase it at very low market value in 2009 with a 30-year mortgage.
Can my daughter sell the apartment? What do I have to do in the meantime to make sure she can make a sale? I don’t want my daughter to be left in the cold and have her bank confiscated.
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The concerns you have are valid concerns. When we draft our wills and think about how much money we leave for our loved ones when we die, I think most of us envision our heirs going to use the funds. that to the maximum. But reality seems completely different. Research has suggested that one in three Americans those who receive an inheritance will end up squandering it.
Certainly, in many cases, such people probably lack the discipline to save money and not spend it haphazardly. However, there are certainly situations where the recipient of the inheritance is not equipped to use it properly. I have received emails from readers who inherited a home, but was unaware of a mortgage or tax debt that caused the property to eventually be repossessed. No parent wants the nest they built for their children to go to waste.
So it’s good that you’re asking these questions right now. For starters, if you haven’t already done so, you should consult an attorney who specializes in estate planning to figure out the best route for leaving the apartment to your daughter when you pass. life. Many people like the idea of creating a trust, because this can bypass the probate process and get the house into their heirs’ hands more quickly. That can work for your daughter because the sooner she gets a right to the property, the quicker she can sell it. That will help reduce the amount she will need to spend on mortgage payments, maintenance, apartment fees, and taxes in the meantime.
At the very least, you should state in your will that you want her to inherit the house, but keep in mind that depending on your state’s laws and how the will was drafted, the estate under the will may be subject to through the probate procedure. That can take time – and cost money.
I don’t recommend adding her to a mortgage or deed. As I mentioned before, doing it before you die means she won’t get the full tax benefit she would have if she simply inherited it. In addition, if your daughter has any outstanding debts, those creditors may come to your property to pay the debt. Most importantly, however, it won’t relieve her of the burden of having to bear the costs associated with the apartment before she can unload it.
There are a few other steps you can take now to make sure she’s well prepared for those costs and responsibilities going forward. Nadine Marie Burns, a certified financial planner and president of A New Path Financial, recommends detailing all apartment-related expenses for a year – everything from taxes and payments to rent. mortgage payments to link and utility fees. Then you need to talk to your daughter, she suggested, so that she is fully informed.
“It can be a positive conversation and too few people have,” says Burns. So far, you’re assuming that your daughter won’t be able to cover these expenses, but you may not have a clear understanding of her finances. If she’s expressed concerns about her ability to pay those bills until she sells the apartment, you might want to start saving up some cash for your daughter that she can use to pay off. those payments.
You can give this money to your daughter over time and make sure she saves. Another option, Burns says, would be to open a life insurance policy and name your daughter as the beneficiary. The size of the policy can be designed to cover the cost of the apartment for a year, plus any ancillary costs associated with selling it.
Finally, you should familiarize yourself and your daughter with the sales policies of your apartment. Some associations retain the right of first refusal and will purchase the property directly from the seller if they do not approve the buyer. Knowing those policies and your daughter’s rights can save her headaches if the condo doesn’t accept a new resident.
I know these conversations can feel uncomfortable. For some, it may feel awkward to lean on your death and be too open about your finances. But when it comes time to let your daughter manage your assets, I’m sure she’ll be grateful for your transparency. Good luck as you navigate these decisions.
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https://www.marketwatch.com/story/i-own-a-condo-and-want-to-leave-it-to-my-daughter-when-i-die-how-can-i-make-sure-she-can-afford-to-maintain-it-11637089325?rss=1&siteid=rss I own an apartment and want to leave it to my daughter when I die. How can I make sure she can afford to maintain it?