No will for the deceased: what happens to mortgage?

[pinkcess]

Hi all,

I was wondering if anyone could provide any insight as to what happens to a family member when they don't have a will, their only surviving parent is not mentally capable in handling an estate which leaves the siblings to handle everything.
The deceased had just bought a condo (within the past year) so I am just wondering what will happen with it? Are we expected to take over the mortgage? How will it be dissolved? My family is very worried about taking on this enormous debt.

Any help is appreciated. Thanks.

[pitz]

Okay.

The deceased had just bought a condo (within the past year) so I am just wondering what will happen with it?

If the estate is has positive net worth, the executor will sell the condo, repay the mortgage loan, and the residue is then available to repay any other debts, and then to whatever beneficiaries.

Are we expected to take over the mortgage?

The lender might offer you the option of 'taking over the mortgage'. If you want.

[asdfvcx]

In Canada family members aren't responsible for taking on deceased relatives debts, so there is no worry there.

The first thing you need to find out is if they have some time of life insurance, that covers the mortgage. If not, then everything in their estate, including the condo, will be sold (if necessary) in order to pay off their debts.

Only then, if there is anything left over, will the remaining money be distributed among the family members, according to the rules in your province.

[LondonTown]

You won't be forced to take on a debt, that's silly.

[SpillOnAisle9]

The Succession Law Reform Act in Ontario covers when somebody dies 'intestate' (without a will)

see Link

You probably want to speak with a lawyer.

[pinkcess]

You probably want to speak with a lawyer.

Thanks for everyone's help.
Does anyone know of a reputable lawyer that deals with these types of issues? I suppose lawyers are generally not cost-efficient so I won't bother specifying that.

[budfrogs]

Thanks for everyone's help.
Does anyone know of a reputable lawyer that deals with these types of issues? I suppose lawyers are generally not cost-efficient so I won't bother specifying that.

Firstly, I am sorry for your loss!

If you are part of a church or some other organization you can ask around if anyone has experience with a lawyer.

I do not know any. Your profile specifies Toronto. You may want to verify that is where all of this is happening as it will be easier to have a local lawyer.

[pinkcess]

Firstly, I am sorry for your loss!

If you are part of a church or some other organization you can ask around if anyone has experience with a lawyer.

I do not know any. Your profile specifies Toronto. You may want to verify that is where all of this is happening as it will be easier to have a local lawyer.

Thank you.

Fair point, my family is located in central Mississauga but are willing to go in to Toronto to meet with someone.

All help and advice is appreciated.

[houska]

Obtaining a legal consultation is your only way to get a definitive answer and highlight what issues might be important.

To the extent you want to trust random opining on a bulletin board, my suspicion is that by default an executor will be appointed. The executor will sell the condo, repay the mortgage, settle any remaining debts (including tax), and then the parent will inherit what is left. If debts exceed proceeds, parent will inherit nothing - and not be responsible for remaining debts. Since you say the parent is not mentally capable, the parent will not be the executor. Presumably the courts will decide who will be the executor. If one of you is regularly acting for your parent as attorney (in view of the mental incapacity), I would suspect that person could apply to be the executor and - assuming it is approved - make the process move more swiftly and more cheaply than if it is some 3rd party.

All gets more complicated if things/people are in different jurisdictions, or if another family member was involved in the purchase or financing of the condo, of course.