4 ms·

Tapping in to a homes equity requires a loan, and yes, those loans will be transferred to their children. EDIT: Yes I meant the loans stay with the estate whic

Tapping in to a homes equity requires a loan, and yes, those loans will be transferred to their children. EDIT: Yes I meant the loans stay with the estate which services the debtors. The house that is typically handed down to the next generation is now sold to make whole the debt.

deleted 11y ago
[deleted]
droffel 11y ago
Your debts do not pass to your children when you die. The worst that happens is that the debts are paid out of the child's inheritance.
- pc86 11y ago
  Not always the case. Pennsylvania for example does have filial responsibility laws where under very specific circumstances debt incurred by the parents can be transferred to the children. One example is nursing home/end of life care, regardless of whether or not the child had any role in it. Source: I live in PA. My elderly parents live in PA.
  - beeboop 11y ago
    I looked into this because I thought it was a little odd. The only precedence I can find of this is a single lawsuit, the PDF of which is here: http://www.pacourts.us/assets/opinions/Superior/out/A36025_11.pdf http://www.pacourts.us/assets/opinions/Superior/out/A36025_1... This really doesn't have anything to do with inheritance, especially so since his mother wasn't (and presumably still isn't) deceased. It has to do with some states having laws requiring parents/children, who have the means to do so, to support their child/parent who is poor or otherwise incapable of supporting themselves. In this court case, the child was found to be financially capable and also legally liable for supporting his mother. Because of this, he was found responsible for paying off the debt, but only as he was capable of doing so. If the son in this case only made the national median income, had a large family to support, and didn't have any wiggle room in his budget, he very likely would not have been found liable for this debt.
- hardcandy 11y ago
  I think he meant a loan secured by property that the kids would otherwise expect to inherit free and clear.
maxerickson 11y ago
Unless the contracts are dumb, the house will be the security for the loan, so it 'transfers to the kids' in the sense that they don't get the house, but it would be really stupid to allow reverse mortgages or home equity loans to be attached to anything other than the house.
- zardo 11y ago
  What other asset do most middle-class retirees have? Social security and pensions aren't inheritable, and much of what liquid assets they have will go to medical care.
  - maxerickson 11y ago
    I dunno, I just felt like the phrasing was unclear. That the parents are in a situation where they decide to sell their house to support their lifestyle is perhaps worth examining, but that's the problem, not that the contract they enter into has to be settled.
- aidenn0 11y ago
  FWIW, there are definitely people hawking full-recourse refis.

deleted 11y ago

[deleted]

droffel 11y ago

Your debts do not pass to your children when you die. The worst that happens is that the debts are paid out of the child's inheritance.

pc86 11y ago
Not always the case. Pennsylvania for example does have filial responsibility laws where under very specific circumstances debt incurred by the parents can be transferred to the children. One example is nursing home/end of life care, regardless of whether or not the child had any role in it. Source: I live in PA. My elderly parents live in PA.
- beeboop 11y ago
  I looked into this because I thought it was a little odd. The only precedence I can find of this is a single lawsuit, the PDF of which is here: http://www.pacourts.us/assets/opinions/Superior/out/A36025_11.pdf http://www.pacourts.us/assets/opinions/Superior/out/A36025_1... This really doesn't have anything to do with inheritance, especially so since his mother wasn't (and presumably still isn't) deceased. It has to do with some states having laws requiring parents/children, who have the means to do so, to support their child/parent who is poor or otherwise incapable of supporting themselves. In this court case, the child was found to be financially capable and also legally liable for supporting his mother. Because of this, he was found responsible for paying off the debt, but only as he was capable of doing so. If the son in this case only made the national median income, had a large family to support, and didn't have any wiggle room in his budget, he very likely would not have been found liable for this debt.
hardcandy 11y ago
I think he meant a loan secured by property that the kids would otherwise expect to inherit free and clear.

maxerickson 11y ago

Unless the contracts are dumb, the house will be the security for the loan, so it 'transfers to the kids' in the sense that they don't get the house, but it would be really stupid to allow reverse mortgages or home equity loans to be attached to anything other than the house.

zardo 11y ago
What other asset do most middle-class retirees have? Social security and pensions aren't inheritable, and much of what liquid assets they have will go to medical care.
- maxerickson 11y ago
  I dunno, I just felt like the phrasing was unclear. That the parents are in a situation where they decide to sell their house to support their lifestyle is perhaps worth examining, but that's the problem, not that the contract they enter into has to be settled.
aidenn0 11y ago
FWIW, there are definitely people hawking full-recourse refis.