This is the type of estate scenario that demonstrates the importance of having a will, no matter how old you are. The challenge, as described in My San Antonio’s article, “Using power of attorney in daughter’s estate,” is untangling the house title, the mortgage, and the taxes. Having a will would have prevented this entire situation from occurring.
Further details: the 19-year-old grandson’s mother died when he was 15. He has made his grandfather power of attorney. The house is not in the grandson’s name, nor is it in the grandfather’s name. The mortgage company won’t talk to either of them since they are not owners of the home.
Does the grandfather need to be on the deed to the house before the mortgage company will talk to him? Why are the taxes in the grandson’s name? The mortgage has the home listed under the daughter’s estate.
Sounds like a mess, doesn’t it?
When a person dies without a will (known as “intestate”) the state’s law determines who inherits their property. The law outlines the ownership, starting with the surviving spouse. Assuming that the daughter was not married, her son is second in line to inherit her assets.
The grandson needs to take the steps to get the deed to the house into his name. He will likely need the help of an experienced estate planning attorney. Depending on some details, which the estate lawyer will be able to help him with, the title to the property will be changed when the correct legal documents are filed with the county.
Once the deed is in his name, the mortgage company will recognize him as the legal owner of the property. They likely have a lien against the house, and mortgage payments must be made current. The mortgage company is required by law to allow the grandson, once he is the legal owner of the house, to continue paying on the loan. They may try to get him to refinance, but the attorney will know if he needs to or should do that. Hiring an attorney to solve the title issue, also addresses the mortgage issue.
As for that power of attorney — stop! Do not name the grandson as agent, nor should the grandson name the grandfather as agent. Revoke it or be certain that it was never signed. The attorney will also be able to help you with this. The grandfather has no authority over the daughter’s home, so the grandson as agent would have no authority either. He must act for himself to fix the deed issue.
Powers of attorney can be very valuable tools. If the situation were different, for instance if the grandson was older and more knowledgeable and needed to help the grandparent, the grandparent could sign a legal document that would name the grandson as power of attorney. However, these documents should be prepared by a lawyer.
This article shows what can happen when there no will and the family does not reach out to an estate planning attorney to help with the issues that result after someone dies. To avoid a long, costly situation, speak with an estate planning attorney admitted to practice in your state and have a proper will and estate plan put into place.
Reference: My San Antonio (May 24, 2019) “Using power of attorney in daughter’s estate”