Question of the Week- Giving Away Property Subject to a Lien

This week’s question:

My father bequeathed his home to me in his Last Will and Testament. The home is subject to a mortgage. There is enough money in the estate to pay off the mortgage. My father’s Will contains a clause that says “I direct that my debts and the expenses of my last illness, funeral, and burial shall be paid from my estate as soon as reasonable after my death.” Isn’t the mortgage a debt of my father that the executor should pay before giving the property to me?


This question is often raised when someone receives a bequest under a Will that consists of property subject to a mortgage. Under a strict reading of the Last Will and Testament, you might think the debt would be paid off. However, there is a specific provision in the Pennsylvania probate law, Section 2514 (12.1) that directs otherwise. It states that the bequest of any property in a Will subject to a security interest passes that property subject to the security interest. This might apply in the case of real estate subject to a mortgage, or an automobile subject to a financing lien. It might become even more complicated if the lender considers the beneficiary a poor credit risk and calls in the loan. This is one reason why some beneficiaries never report the death to a mortgage company or finance company and simply continue to make timely payments. I am not condoning but acknowledging that it does sometimes happen.

Not every Last Will and Testament contains a clause related to the payment of debts. That was an essential clause in Pennsylvania wills before changes in Pennsylvania law in the 1950s and 1970s, but it is no longer necessary. Nevertheless, some attorneys continue to place the clause in their documents.

If you intend to pass property along to someone free and clear of any liens or security interests, the clause to use is as follows:

“I devise my principal residence located at 1234 Lawrence Road, Broomall, PA, or any successor principal residence which I may own at my death, to my son, Abe, if he shall survive me, free of any mortgages, liens, real estate taxes or other encumbrances, which encumbrances shall be discharged by my executor from my residuary estate."

You may want to check your Last Will and Testament and compare it to the above. Was it drafted according to your wishes?

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Tags: legal, documents, estate planning

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