Can I Borrow on Properties to Pay Estate Tax?
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Question:
My minor child has inherited two properties along a with 15% inheritance tax that I can’t afford. I am the executor of the estate that she is inheriting. I don’t really want to take out a loan on my home to pay the tax if I don’t have to. Is there a way to take out a loan against one of the inherited properties so that someday she can take over the payments? My relative who left the properties to my son didn’t want me to sell them. So I’m trying to avoid selling one just to pay for the taxes.
Response:
You should be able to take out a mortgage on one or both properties. However, you’ll just have to sign it personally as well as on behalf of your son. The bank may also require that your name be added to the properties’ title. If so, you can transfer it back once your son is an adult and can afford to take on the obligation entirely himself, if you haven’t been able to pay it all back entirely by then.
Related Articles:
Can We Take Out a Home Equity Loan on Our House in Trust?
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Does Your State Have Estate or Inheritance Taxes?
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