Online Will? (1 Viewer)

[Sparky Polastri]

My partner just spent 4k on a trust, but she now has complete piece of mind regarding all her assets. Expensive, but well worth it IMO. I'll be doing the same soon as all I had was a will that I bought from some template online.

Curious if having a trust means that you need to move the deed of real estate into trust name. If so, then basically a no go unless you own outright.

Common misconception. An existing lien/mortgage does not prevent the transfer of real estate. The mortgage probably has a clause that allows the lender to call the loan in default because of the transfer, but as a practical matter, they almost never do for a conveyance from individuals into a trust those same individuals control.

This is true but now with higher mortgage rates, anyone locked in at a low rate should be very careful to not give a mortgage holder the ability to call a low interest rate mortgage.

This is a great point. I was thinking the other day, and I have zero clue so forgive the ignorance, but how long before people wanting to sell who enjoy a 2-3% interest rate start advertising that to entice a sale and figure out a way to transfer that to a buyer? I don't think there is any way to do it other than the buyer taking over payments on the loan but I'm guessing there's some enterprising eager beaver trying to figure out how to do it.

I don't think any mortgage lender would let a buyer take over payments. Especially in a low interest scenario. No upside and significant downside. There are probably a few sellers casually exploiting this scenario in rent to own schemes but probably more to their own benefit than the "buyer".

It's my understanding that this is established at the mortgage's inception (called assumable mortgages). Hard to find in conventional mortgages. Will find mostly in FHA, USDA, VA loans etc. That said, I don't think if one inherits a house they have to go through a refinance etc. Mortgage lenders have some hoops, but will usually allow you to take over the mortgage "as is". Generally speaking of course.

When we moved back to MN a couple years ago in a high-interest rate environment, we looked into assumable mortgages. Our agent basically said, good luck, no seller is ever going to agree to that.

It wasn't really clear to me why.

Yeah, that's weird. No skin off their backs AND it would help THEM sell the house. Maybe your agent didn't understand what it was

 

[BeTheMatch]

My partner just spent 4k on a trust, but she now has complete piece of mind regarding all her assets. Expensive, but well worth it IMO. I'll be doing the same soon as all I had was a will that I bought from some template online.

Curious if having a trust means that you need to move the deed of real estate into trust name. If so, then basically a no go unless you own outright.

Common misconception. An existing lien/mortgage does not prevent the transfer of real estate. The mortgage probably has a clause that allows the lender to call the loan in default because of the transfer, but as a practical matter, they almost never do for a conveyance from individuals into a trust those same individuals control.

This is true but now with higher mortgage rates, anyone locked in at a low rate should be very careful to not give a mortgage holder the ability to call a low interest rate mortgage.

This is a great point. I was thinking the other day, and I have zero clue so forgive the ignorance, but how long before people wanting to sell who enjoy a 2-3% interest rate start advertising that to entice a sale and figure out a way to transfer that to a buyer? I don't think there is any way to do it other than the buyer taking over payments on the loan but I'm guessing there's some enterprising eager beaver trying to figure out how to do it.

I don't think any mortgage lender would let a buyer take over payments. Especially in a low interest scenario. No upside and significant downside. There are probably a few sellers casually exploiting this scenario in rent to own schemes but probably more to their own benefit than the "buyer".

It's my understanding that this is established at the mortgage's inception (called assumable mortgages). Hard to find in conventional mortgages. Will find mostly in FHA, USDA, VA loans etc. That said, I don't think if one inherits a house they have to go through a refinance etc. Mortgage lenders have some hoops, but will usually allow you to take over the mortgage "as is". Generally speaking of course.

When we moved back to MN a couple years ago in a high-interest rate environment, we looked into assumable mortgages. Our agent basically said, good luck, no seller is ever going to agree to that.

It wasn't really clear to me why.

Yeah, that's weird. No skin off their backs AND it would help THEM sell the house. Maybe your agent didn't understand what it was

No, she's really good. And I thought the same as you. Maybe it had something to do with the lenders or something. No idea.

 

[Mrs. Rannous]

And it's not that some state's rules are simpler, it's that they differ, a lot.

Yep. The step up cost of the house value may not matter at all. State requirements are as different as a dachshund and an elephant.

I want to know how much pagentry you are talking about here? Did trumpets sound when you walked in, Ron? We went, answered questions, reviewed stuff, enjoyed the wonders of Covid, and signed the forms. It was easy peasy with a proper estate attorney.

(And for Mr Cynical, I am not a lawyer.)

Pageantry was probably the wrong word. Forced archaic process? Formality? I don't know what to call it. I just never enjoy lawyer visits. I deal with plenty of them in my work life and post Covid pretty well have most of those interactions relegated to video conference or phone. The local lawyers here seem to only function with a "come on in and we'll talk" kind of mode and then when we do it's sitting in a lobby, having pointless conversation, then we finally get to business and then they take forever to just get the thing we're there for done. Maybe what I really need is a "virtual visit only" lawyer. Do those exist?

I didn't have your experience with my local lawyer (who I had zero experience with before) at all. They had told me ahead of time what to bring with me. I got there early and I waited maybe 5 minutes before they ushered me back to meet with the attorney. They had everything formal already typed up and we spent maybe 10 minutes filling in blanks or correcting things. It may have taken more time for me to sign everything than I spent discussing. I was in and out in under 30 minutes.

I dunno..... I live in a small town, this attorney was well-established in the community (I was new), and it was painless for me (& I am not a patient person). This was also 15 years ago, so maybe things have changed since then

We did this in 2020, and it was exactly like this. Answering some questions in an online form, coming in for some of the more detailed bits, and going back to sign the completed documents. No time wastage at all.

 

[Mrs. Rannous]

And it's not that some state's rules are simpler, it's that they differ, a lot.

Yep. The step up cost of the house value may not matter at all. State requirements are as different as a dachshund and an elephant.

I want to know how much pagentry you are talking about here? Did trumpets sound when you walked in, Ron? We went, answered questions, reviewed stuff, enjoyed the wonders of Covid, and signed the forms. It was easy peasy with a proper estate attorney.

(And for Mr Cynical, I am not a lawyer.)

The step up benefit I was referring to was the one to avoid federal capital gains. Doesn't matter what state you're in.

And the tax basis adjusts when the property is inherited, so there is no penalty for this.