What Immediately Happens
This all depends on a variety of circumstances.
For instance, it all depends on the type of ownership you have on your property. The type of property ownership include:
Then, once the ownership has been determined, it’s important for the home to be cleared out and keep a register of assets.
If you had passed away with no spouse/partner or dependent, then your home would need to be clear and removed of personal belongings. Your executor would be the one to take inventory of each of your belongings and determine the value.
What happens to your mortgage?
What happens next all depends on whether you have your valid will, and who you named as beneficiaries of your estate.
If you do not have a valid will nor a beneficiary, then your property would generally be divided between your relatives. Each State and Territory have different laws regarding how the property is divided. However, if you never had named anyone to receive the property, it may end up going to a person who may not have been your choice.
That’s why, to prevent complications, you want to make sure that you have a valid will that names the beneficiaries of your property. Because if you have named a beneficiary for the property in your will, they are going to be the ones who will inherit it when you die.
Along with inheriting the property, they also will inherit the debts that go with it. This means that if your mortgage was not paid in full when you pass away, the beneficiary will have to be the one who takes care of it.
No mortgages are ever cleared until they are paid off. Our debts don’t disappear when we die.
This is understandably a heavy financial burden on the beneficiary. If the beneficiary is not able to pay the debt, they may have to sell the house. Unless they decide to use their own assets to pay for the mortgage, falling short of the mortgage may cause them to lose their home.
Sometimes, the bank may allow the beneficiary to take ownership of the mortgage and continue paying it off as normal.
What if you own property with someone else?
If you own property with someone else, all owners have the responsibility to pay off the debt. If in the event you were to pass away, the surviving owner(s) will have to be the ones to pay off the remaining mortgage.
If the surviving owner cannot afford to pay off the mortgage they are left with, their option is to sell the property to pay it off.
What if your property is being rented out?
In these scenarios, you would need to look at the lease agreement. Typically, the lease agreement will continue between the tenant and the executor.
If the agreement needs to be terminated, the tenants must be provided with appropriate notice based on what it says in the lease agreement.
Can your property ever be disposed?
If you are the only one who owned the property, it’s eligible to be disposed of. Each State and Territory have different laws when it comes to the types of property that can be disposed.
Regardless on where you live, if you want your property to be disposed, and have no one inherit them, it’s important that you make it clear in your Will.
What if you were only a tenant in a rental property?
If you were only renting a home, and there is no spouse/partner or any dependents that are still going to be living in the home, the home will be handed back to the real estate agent once the belongings have been removed.
Why You Should Create a Will?
To prevent as much financial burden on your beneficiaries as possible, it’s important to create a valid Will. This is so all your assets and property are properly disputed according to your wishes. Other benefits to creating a Will include:
Safewill Can Help You
If you need help at any stage of the will-writing process or even the life-planning process in general, Safewill is here to help you!
You can first check out the Safewill blog where we have many guides to help you with arranging these important life arrangements.
Then, you can get started today with Safewill. We have made the process really easy for you, and they are making it very simple for you to sort out your end of life arrangements.