How long do you have to pay off a reverse mortgage after the homeowner dies?

Lou: I have a question regarding a reverse mortgage. My sister is a widow and she has a reverse mortgage. I guess a year after she's deceased, the family would have the opportunity to sell that property, or it goes back to the bank, or you can pay off the mortgage. Is that correct?

Attorney Tom Olsen: I'll say a little bit more clearly. When your sister passes away, whoever inherits that piece of property has one year to pay off that reverse mortgage. You might pay it off by selling her home and paying off the mortgage, or you might refinance and get your own mortgage and pay off that reverse mortgage. You're correct, typically, it's one year in which to do so.

Lou: Okay. Currently, she does not have a will to who to pass that to. She wouldn't need that, is that correct?

Tom: If she does not have a will, Florida statutes is going to write a will for her. She's a single or widowed lady. Does she have any children?

Lou: She does not.

Tom: Any grandchildren? Any deceased? Any lineage?

Lou: No. Just siblings and nieces and nephews.

Tom: Okay. How many siblings did she have?

Lou: Four.

Tom: Okay. If she does nothing, then when she passes away, her estate is going to be divided equally between her four siblings. If she says, "Fine, that's great, that's okay with me," well, technically, she would need to have a will. If she says, "No, I want to leave everything to my one sibling," she needs to have a will to do that.

Lou, all in all, I'm going to encourage her to get this estate planning done because remember when we do a will, we do three other related very important documents. We do a living will declaration, where she asks that she not be kept alive by machines, a healthcare surrogate, where she's appointing somebody to decide what doctors, what hospitals, what medications for her, and a financial power of attorney that will allow somebody to pay her bills and manage her financial affairs if she's not able to. Lou, all in all, I recommend that she does have a will together with these related documents. We'd be pleased to assist her at the Olsen Law Group. Lou, does that answer your question for you?

Lou: Yes, it does, and I thank you so much, Mr. Olsen, for your time.

Tom: You're very welcome, Lou. Appreciate it.