In California in 2020 my mother quit claimed her property to me. She and her husband (who's name was removed from deed in 2010 via interspousal deed transfer) had a loan on the property through B of A. Mother just died and husband is in prison. Where does that leave me in regards to the monies owed on the property?
1 Answer from Attorneys
First off, from a tax standpoint it is unfortunate that she quitclaimed it to you rather than leaving it to you in a trust or by will, or even just holding on to it until she passed away. Had she done that, you only would have owed gains tax on the increase in value from her date of death to date of sale. You will now owe taxes on the entire increase in value from when she bought it.
As for the money owed BofA, again the quitclaim was a mistake. Had you inherited it, you would have a legal right to keep the loan in place and keep the property as long as you made the payments. Now, if BofA chooses, they can demand full payment now. If you can't refinance, you will have to sell it or they can foreclose.
The only good news is you are not personally liable for the debt. So if you decide you just want to walk away from the property, BofA cannot chase you for payment. Basically the house owes the money, not you. You only owe the money if you want to keep the house.