Oklahoma Estate Administration: The Mortgage follows the Property

 

You are dealing with the death of a love-one or friend, which is very sad.

During the process, you find out that your relative left their home to you (maybe using a transfer-on-death deed, explained here).

You are going to inherit a house, that is good.  Then you find out you are also inheriting a mortgage on the house.   Why?

Well, the easy answer is because there is a mortgage on the house and the bank wants to be paid.  The more legalized answer is that Oklahoma law makes you responsible for the mortgage as well:

When real property, subject to a mortgage, passes by succession or will, the successor or devisee must satisfy the mortgage out of his own property, without resorting to the executor or administrator of the mortgagor, unless there is an express direction in the will of the mortgagor that the mortgage shall be otherwise paid.

Okla. Stat. Ann. tit. 46, § 5 (West)

So, if you inherit the mortgage, you must pay for it from your own money unless your relative left a last will and testament.  And, that last will and testament must provide that the relative’s estate pay for the mortgage.

Potentially, a good news/not-so-good news scenario:  It is good you are the owner of a home, it is not as good you are the owner of a mortgage as well and a new monthly payment to the bank.

Shawn Roberts

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I write about and try to answer practical Oklahoma legal questions. I tend to focus on estate planning and business issues. I make a living as an attorney working for Resolution Legal Group in Oklahoma City. I am husband to Amy and the father of Sam and David. We live exactly in the path where the "wind comes sweeping down the plains."