Prenuptial agreements are becoming increasingly common in Florida and across the United States and can be an integral component of your overall estate plan. A prenuptial agreement is a contract between two individuals who are planning to get married that outlines the terms of their financial relationship in the event of a divorce or death. These agreements are particularly important in Florida, which is an equitable distribution state, meaning that in the event of a divorce, marital property will be divided in a manner that the court considers fair and equitable, but not necessarily equally.

Having a prenuptial agreement in place can provide clarity and security for both individuals by establishing the ownership and division of assets and liabilities prior to the marriage. It can also help to reduce conflict and uncertainty in the event of a divorce, as the terms of the agreement have already been agreed upon.

While prenuptial agreements are most commonly associated with individuals who are entering a marriage with significant wealth, it is important to note that prenuptial agreements are not just for the wealthy. They can be beneficial for anyone entering a marriage, regardless of financial circumstances. Prenuptial agreements are especially important for blended families, as they can help to protect the interests of both the individual and their children from prior marriages.

Blended families often face unique challenges when it comes to estate planning and the distribution of assets in the event of death or divorce. In the absence of a prenuptial agreement, Florida intestacy laws dictate how a person's assets will be distributed in the event of their death if they do not have a will. These laws may not align with an individual's wishes or protect their children from prior marriages. For many blended families, lack of planning can result in the unintended consequence of disinheriting one spouse’s heirs. A prenuptial agreement can provide clarity and certainty for blended families by specifying how assets will be divided in the event of death or divorce, ensuring that each spouse's interests and the interests of their children are protected.

In Florida, prenuptial agreements must comply with state law, including requirements for fairness and disclosure. It is important to have an attorney who is knowledgeable in prenuptial agreements review the agreement before it is signed to ensure that it is valid and enforceable.

At the Pyles Law Firm, we understand the importance of securing a stable future for not only you and your spouse, but also for your children. That is why we are dedicated to providing comprehensive legal support in the creation of both prenuptial and postnuptial agreements. Our team is equipped and ready to assist you in protecting the interests of your family through thorough and effective estate planning. Contact us today to schedule a consultation and learn more about how we can help you plan for a secure future.

DISCLAIMER: Nothing in this blog post constitutes legal advice. The information provided herein is merely provided in the spirit of education. If you have a legal question, you should consult an attorney for your specific legal situation. Further, nothing in this blog shall be construed to have started an attorney-client relationship. No such relationship exists until you sign an engagement letter with the Firm.

Inheriting a Home with a Mortgage

Inheriting a home with a mortgage can be a complicated process. Various steps should be taken in order to transfer the loan and keep the home. Before you start the process, it is important to understand the implications and your options.

What to Know When You Inherit a Home With a Mortgage

In general, when you inherit a home with a mortgage, your options are limited to the following:

Sell the home to pay off the mortgage and retain the remaining proceeds from the sale;
Opt to keep the home and use other assets to pay off the mortgage;
Assume current mortgage payments under the original terms of the loan; or
Refinance under new loan terms.

The Consumer Financial Protection Bureau (CFPB) allows lenders to name an heir as the borrower without going through the normal loan approval process, provided they can demonstrate the ability to repay the loan.

The important takeaway here is that when you inherit a home with a mortgage, you are responsible for the existing loan. You should contact the lender as soon as possible to notify them of the change in ownership and discuss your options.

If You Choose to Assume the Mortgage

Under the CFPB, family members have a right, independent of the mortgage company, to decide whether or not to assume a mortgage on property they have inherited. Before making a decision on whether to assume the mortgage, you should gather as much information as possible to make an informed decision. You will want to know the monthly payment amount, where to send payments, and how the escrow is calculated. Additionally, you should be aware of the loss mitigation options available and the balance on the loan. Once you have all this information, you can decide if it makes sense to assume the mortgage, modify the terms, sell the house, or let it be foreclosed on.

Do I need Good Credit to take over the existing loan?

Good credit is not a requirement for taking over an existing, inherited mortgage. According to the CFPB, lenders should allow successors to be added as an obligor or substituted for the current obligor on an existing mortgage. This includes adding the inheritor to the mortgage under existing terms, without demanding a loan application or verifying credit history, income, etc. An inheritors credit should only be taken into consideration if the inheritor decides to refinance or take out a loan against the home's equity.

What Happens if the Original Borrower was in Default?

A mortgage company does not have the ability to block an assumption based on the default status of the mortgage. Individuals who inherit a home have a right to assume a mortgage in order to pursue a loan modification before curing any default.

Inheriting a home with a mortgage can be a complicated process. It is important to understand the implications and your options before making any decisions. If you need help, consider speaking to an attorney or a financial advisor.

Consumer Financial Protection Bureau