“Mom, Can You Co-sign?”: Did a Family Member Participate in Your Loan?

Often, young adults ask other family members to participate in a loan to assist the young adult in purchasing his or her first home. As a recent article explains, this can become extraordinarily problematic at the family member’s death.

Even though the family member pays little or nothing towards the home, his or her name will usually be added to the title. This gives him or her an ownership interest in the home. If the family member’s estate leaves the home to those who actually paid for it, no problems will arise.

However, if the family member’s estate does not deal with the title, the homeowners may have a legal battle on their hands. In this situation, the decedent’s beneficiaries may fight to have the decedent’s portion of the home included in the estate. These battles especially arise if there is already animosity or distrust within the family.