Aiming_4_55
Thinks s/he gets paid by the post
Yesterday during dinner with the extended family, hypothetical scenario on mortgage liability was brought up. I tried to avoid the topic as I felt no one really wanted to discuss it.
My brother-in-law, the youngest of the adults, said, if Dad passed (age 70+, home value $90k, mortgage balance $140k, loan modification completed summer 2011, payments affordable for the next 5 years, then interest rates goes up) where would things land? Almost everyone got quiet. He then said really, should we have money on the side to plan for things, i.e. travel (Dad lives out of state), funeral expenses, mortgage, credit cards, etc.
The sister-in-law with the closest knowledge said it’ll be covered. The BIL said everything? SIL said probably. I said we all kind of know from personal expenses shared when Mom passed which was not all covered. I would anticipate some out of pocket expenses since she had a larger life insurance policy than Dad.
Previously Dad chatted with me about his life insurance policy of $20k, so I kind of know it’s a small policy. I also know he was questioning the need as he was trying to cut expenses.
Who gets first dibs of the estate?
- Funeral expenses
- Healthcare costs (has various Medicare, etc. but some out of pocket expenses)
- Mortgage Company
Assuming the mortgage exceeds the policy value, they will foreclosure on the property when the time comes was my assumption.
While the SIL is thought of as the “leader”, she has her limitations. I hinted that she as the executor of the estate to maybe research various scenarios. One, what is the cost of the policy vs. cost of funeral as it might be better to self-insure for that.
Some thought that the estate would get choice of which bills to pay (translation, pay nothing and pocket as inheritance – no expectation here.).
Thoughts? Thanks for your feedback.
My brother-in-law, the youngest of the adults, said, if Dad passed (age 70+, home value $90k, mortgage balance $140k, loan modification completed summer 2011, payments affordable for the next 5 years, then interest rates goes up) where would things land? Almost everyone got quiet. He then said really, should we have money on the side to plan for things, i.e. travel (Dad lives out of state), funeral expenses, mortgage, credit cards, etc.
The sister-in-law with the closest knowledge said it’ll be covered. The BIL said everything? SIL said probably. I said we all kind of know from personal expenses shared when Mom passed which was not all covered. I would anticipate some out of pocket expenses since she had a larger life insurance policy than Dad.
Previously Dad chatted with me about his life insurance policy of $20k, so I kind of know it’s a small policy. I also know he was questioning the need as he was trying to cut expenses.
Who gets first dibs of the estate?
- Funeral expenses
- Healthcare costs (has various Medicare, etc. but some out of pocket expenses)
- Mortgage Company
Assuming the mortgage exceeds the policy value, they will foreclosure on the property when the time comes was my assumption.
While the SIL is thought of as the “leader”, she has her limitations. I hinted that she as the executor of the estate to maybe research various scenarios. One, what is the cost of the policy vs. cost of funeral as it might be better to self-insure for that.
Some thought that the estate would get choice of which bills to pay (translation, pay nothing and pocket as inheritance – no expectation here.).
Thoughts? Thanks for your feedback.