Owelty To Settle a Trust
Using a/your mortgage or a new mortgage is a good way to pay off an owelty to Siblings upon liquidation of a parents property. There are a number of ways to use an owelty, and it is most commonly used in divorces. Lets use an example to explain. Let us say that there is a last surviving parent in a home that is free and clear or they can even have a mortgage, but there is enough equity that upon selling the home, there is funds that will be distributed to the surviving family members, usually siblings. If one of the siblings would like to keep the home, they can refinance the home and during that refinance, the equity in the home can be paid out to the surviving siblings. If say the home is a $400,000 property with a $100,000 current mortgage on the property and there are 3 siblings recieving equal amount of funds from the sell, the sibling keeping the home can refinance the property and through the owelty, (of the $300,000 in equity) your new mortgage would be $300,000. I get the $300,000 because there is already a $100k mortgage, plus the $200,000 subtotal that is beging paid out to the other 2 siblings at $100k a piece.
Rob says
This is very interesting to me, because we are in that situation now with my mother in law deceased.. Can you explain this more maybe in a PM, or can you shoot me some sites to look into? And is this nationwide?
Vene' says
What an informative article!! I ‘ve never thought of this
Rachel says
Wow, I never even knew about an owelty. Thank you for the information!
John Hurd says
Very well discussed Brad, giving an instance explains it all.
Nice post you have here.
Anita Breeze says
Hmm, never heard of this before. Is it a US thing? I’m Canadian.
Karen Bradley says
That is a really great idea. I wish we had done that with my in-laws house.
Meli says
I learn something new everyday!
Irene S. says
Great information. And a new word for me today – owelty!
Thanks
Christy Garrett @ Uplifting Families says
This is excellent information. I love how you even shared a great example of how the owelty works. I haven’t ever heard of that term before and learned something new today. 😉
Brad Lynch says
I wanted to thank these folks for their nice comments on my post. Christy, Irene, Melin, Karen, Anita, John, Rachael, Vene, and Rob. Thanks very much! Anita, I don’t know if they do this in Canada or not, but I would suppose that they have something similar to this.
Rob, other than my posts, there isn’t much on the internet about the owelty and it’s variety of uses. If you go onto my site, and use the search bar w/in my site and type the word owelty, you will see all most posts about this program…until now, all my posts are tailored to the use of an owelty in divorce. Whether using it for divorce or for settling a trust or will, my previous posts still provide general basics of how it’s all set up and the basics of what an owelty is. I’m not 100% sure it’s nationwide, but I would bet that it is. I only do loans in Texas…I would help give you advice even if you are outside of Texas though. You can also watch some of my short video blog posts on Youtube about the owelty too. If you go to Youtube and search the term “tx owelty”, I’m about the only one that comes up. Good luck and let me know if you need my help further. Feel free to email me directly at brad@yourmortgageguyforlife.com or call me at 469-450-2723.
Best wishes,
YMGFL
Brad Lynch
Allen Hall says
very informative
Robin F. says
good information…. Thnx again for all your informative posts!!!
Deborah says
Good article about what can be done with a home with equity after a parent’s death. I’m sure that it comes up on occasion.
Yvonne Brown says
Thanks for sharing this insightful information!
Yvonne Brown
Dov Shapira says
Is it good time to refinance ?
Deanna says
this is really great info. i have to share it
Tyler says
uh oh!
Dionne says
My family did this. Now my aunt is living in a home that has been in our family around 75 years.
Casey Gardner says
Who knew all this and glad we have you to turn to ask and read your blog! Great article!!!
Daniele Holmberg says
Very informative information:) Thank you very much:)
Debi@ The Spring Mount 6 Pack says
Great article. It is good to know the information before trying to deal with it, during a stressful time