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Can a beneficiary use their inheritance as a down payment on the property they have inherited?
Wiki User
∙ 13y ago
One doesn't have to borrow money to buy something he already owns.
However, if there is more than one beneficiary inheriting a single property, things can get more complicated.
Example:
Let "A" represent one person and "B" represent another
Suppose A and B equally inherit a house that they agree is worth $100, and A wants to buy B out. A only needs to pay B $50 for his share of the house.
A has no cash, so B agrees to accept A's half of the house as "down payment" on the whole. So A now owes B $100 and begins to make payments.
If sometime before the loan is payed, A defaults, dies, or whatever, then B becomes sole owner of the whole house.
Suppose instead that B really wants cash, so A goes to a bank to ask for $50, and suppose the bank also agrees the house is worth $100. The bank wants collateral, and it requires A to put up the half of the house he already owns.
So now the bank is in the same position as B above.
What happens is there is more than two people? What happens if the bank thinks the house is only worth $90, but B disagrees? It gets... complicated.
Wiki User
∙ 13y ago
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What is the difference between a mortgage and monthly rent?
Monthly rent is payment for using someone else's property.A mortgage payment is payment for a loan you obtained to purchase real property that you own.Monthly rent is payment for using someone else's property.A mortgage payment is payment for a loan you obtained to purchase real property that you own.Monthly rent is payment for using someone else's property.A mortgage payment is payment for a loan you obtained to purchase real property that you own.Monthly rent is payment for using someone else's property.A mortgage payment is payment for a loan you obtained to purchase real property that you own.
Can you stop a good for payment cheque?
No. A good for payment is automatically paid to the beneficiary upon the maturity of the check. A bank undertakes the responsibility that it will not stop the payment of the check under any circumstances.
How do you get your down payment back on foreclosed property?
Your down payment was used to purchase the property and was paid directly to the seller. You don't get it back.
What is an intermediary bank?
An intermediary Bank is any Bank through which a payment must go to reach the beneficiary Bank.
What are the disadvantages of using a company that would give me a quick inheritance advance?
When you get an advance on an inheritance before the estate settles, you will not get the full amount. The companies that provide these advances will take a significant percentage of the inheritance, in exchange for the prompt payment and additional risk they take on.
What if the property is in a trust and I am the beneficiary of that trust?
Under UK Law: The trustee's must authorise the release of the property to the beneficiary(s) The beneficiaries under certain trust law can demand the property of the trust, but the trust deed must state a legal 'absolute' entitlement to that property. If the beneficiary has an absolute right to that property and has attained the stated age at which he or she should receive that property then the trustee's must authorise the payment to the beneficiary. IF it is a discretionary trust then you are only a 'potential' beneficiary and have no legal right to demand the property
Any statistics on how many life insurance claims are disputed by family members and does the beneficiary dictate payment?
Yes the beneficiary on file gets the payment
Can you receive life insurance payment if your in prison?
Yes. The beneficiary of a life insurance payment can always receive the payment regardless of where he or she is.
Can the 1st listed beneficiary deny receiving the death payment If so will the 2nd listed beneficiary receive the money?
If the first person who is listed as the beneficiary does not want the payment it will go to the second person listed. If there is no second person listed it will go to the spouse.
Will you owe income tax on an inheritance after the inheritance tax is paid?
In the USTax issues regarding estates and inheritance are an extremely complicated matter as you can see from the various responses below. You should get your answers from an experienced tax professional who is an expert and up to date on estate tax returns and tax consequences for beneficiaries. State laws vary and certain inherited property is subject to state and federal taxes.If you inherit something like a tax-sheltered account, you may owe income taxes when you make withdrawals from the account. Examples are a traditional IRA or a 401k.If you inherit property that has gone up in value since the date of death, you may have to pay tax on the increase in value when you sell it.If you inherit US Savings Bonds on which the previous owner has not been paying taxes annually, you may owe income tax on the interest when you cash them in.If you inherit corporate bonds, you may have to pay income tax on any interest payments after the date of death.As a general rule, property of value, accquired by inheritance is not taxed as income to person who receives the property. On the other hand, the transaction of the transfer of property belonging to an 'estate' is taxed to the 'estate' if the total value of the estate exceeds certain amounts. The amount of the tax is determined by the value of the estate, and not the value of the individual property in a transfer.It is more or less safe to say that an inheritance is not taxed as income to the person who inherits. However, if the property is transfered before the proper transfer tax is paid, the state or federal government can go beyond the transfer to the property in the hands of the inheritor.It is possible to have some taxable income from an inheritance the source and the type of income that is inherited is what will determine this.Inherited pension or IRA. If you inherited a pension or an individual retirement arrangement (IRA), you may have to include part of the inherited amount in your income. See Survivors and Beneficiaries in Publication 575, if you inherited a pension. See What If You Inherit an IRA? in Publication 590, if you inherited an IRA.Expected inheritance. If you sell an interest in an expected inheritance from a living person, include the entire amount you receive in gross income on Form 1040, line 21.Bequest for services. If you receive cash or other property as a bequest for services you performed while the decedent was alive, the value is taxable compensation.Taxes may be due depending on how long you have held the property since it was inherited and it is sold at a gain.You may or may not depending on the amount and the nature of the property: real property, cash, annuity, stocks, etc. Your first move should be to get your information from an experienced "tax practioner" that is familiar with and up to date on preparing estate returns (706, 1041) and the resulting effect on beneficiaries.State inheritance taxes must be paid within a certain time period from the date of death. In New Jersey it is 8 months. Usually the estate pays it and deducts that amount from the amount that person is to inherit. Thus, the inheritance tax payment might be made a good deal sooner than the person actually receives the inheritance. The federal estate tax is a tax on the estate, not on the inheritances by individual beneficiaries, so that tax has nothing to do with the time a beneficiary receives the inheritance. An inheritance is not "income" for income tax purposes under the IRS Code; therefore the time for inheritance tax payments has nothing to do with the time for income tax payment.Inheritance tax, estate tax and death duty are the names given to various taxes which arise on the death of an individual. In United States tax law, there is a distinction between an estate tax and an inheritance tax: the former taxes the personal representatives of the deceased, while the latter taxes the beneficiaries of the estate. However this distinction does not apply in other jurisdictions: for example, if using this terminology UK inheritance tax would be an estate tax.In the UKIn the United Kingdom, inheritance is not taxed as income, but there might be a liability to inheritance tax - this would be subject to several factors including the relationship to the beneficiary and the amount of the estate.If Probate was applied for succesfully and correctly money received from an inheritance is tax free. It is the estate that is taxed, generally before anyone receives any money. Inheritance tax must be paid before you receive the Grant of Probate or Letter of Administration and is only due in England for estates above £312k as of April 08-Apr 09. (Or £624k if a married couples allowance is claimed under the new rules)
What are the rights of cosigner of inheriting when the primary dies?
Co-signing gives no rights of inheritance unless that is agreed to in writing at the time of the co-signing.It should be noted that if the primary borrower dies and their estate cannot pay the debt, the co-signer will be responsible for payment of property they do not own.Co-signing gives no rights of inheritance unless that is agreed to in writing at the time of the co-signing.It should be noted that if the primary borrower dies and their estate cannot pay the debt, the co-signer will be responsible for payment of property they do not own.Co-signing gives no rights of inheritance unless that is agreed to in writing at the time of the co-signing.It should be noted that if the primary borrower dies and their estate cannot pay the debt, the co-signer will be responsible for payment of property they do not own.Co-signing gives no rights of inheritance unless that is agreed to in writing at the time of the co-signing.It should be noted that if the primary borrower dies and their estate cannot pay the debt, the co-signer will be responsible for payment of property they do not own.
In a community property state is property inherited after marriage considered community property?
Property acquired prior to marriage is separate property and remains separate unless the spouse is granted on title and contributes to the mortgage payments from community funds, then they acquire an interest in that separate property in proportion to their contributions. Paying insurance taxes, utilities is not considered a basis to make the property community.
How do you change ownership of a life insurance policy when insured is deceased?
Ownership cannot be changed after death. All rights and responsibilities of the owner of the policy end at death of the insured. At death, proceeds will be paid out to the beneficiary and if the method of payment was decided before death then payment is set as well. If payment method is not set then the beneficiary can decide how they want to received payment. There are many ways they can receive payment.
What is the difference between a mortgage and monthly rent?
Monthly rent is payment for using someone else's property.A mortgage payment is payment for a loan you obtained to purchase real property that you own.Monthly rent is payment for using someone else's property.A mortgage payment is payment for a loan you obtained to purchase real property that you own.Monthly rent is payment for using someone else's property.A mortgage payment is payment for a loan you obtained to purchase real property that you own.Monthly rent is payment for using someone else's property.A mortgage payment is payment for a loan you obtained to purchase real property that you own.
How can one force a quitclaim to property of a sibling who inherited an equal part but refuses to make equal payment of the mortgage?
I recommend contacting a lawyer or at least a Realtor. You may have to file suit to get action from the sibling that is falling behind. It will be worth it to not lose the equity in the property.
What is the definition of a copay?
When a beneficiary is required to make a payment in addition to the amount that will be paid by the insurer, this is called a co-payment, or co-pay for short. The word co-payment is a noun.
Who collects the life insurance if the policy holder and beneficiary have died?
If the beneficiary of a policy has died, the estate of the beneficiary can still collect the insurance payment, assuming that the beneficiary does have an heir or heirs of some kind (as most people do). Note that this is a fairly unusual situation, because normally when a beneficiary dies, a new beneficiary is named. There is no reason to allow the policy to have no living beneficiary, unless the insured and the beneficiary happen to die at about the same time, and there is no time to name a new beneficiary.
