Administrative errors can create an estate planning fiasco
For a surviving spouse, the ability to stay timely on mortgage payments may be a valid concern. However, readers should be aware of an insurance policy that may protect surviving spouses against foreclosure.
In a recent news example, a widow thought she was about to lose her home after making the mortgage payments for over ten years on her own. She was unaware that her late husband had taken out a special insurance policy that would pay off the bulk of the mortgage in the event of his death. The lender had apparently promoted the $100,000 policy.
For reasons that are unclear, the Bank of America subsidiary that collected the mortgage payments did not arrange for the payoff. In fact, it even charged the widow for the monthly insurance premium, in addition to the mortgage payments. For that behavior, the company is now facing negligence and fraud charges in a federal lawsuit.
In a statement, a Bank of America spokesperson cited multiple administrative issues that might have added confusion, such as various aliases used by the widow's late husband and her own lack of knowledge of the policy.
Unfortunately, this may not be an isolated incident. Our law firm focuses on estate planning and understands the importance ofpreparing a careful inventory of estate assets and debt obligations, whether they involve real property, bank accounts, securities or retirement accounts.
Don't let an administrative injustice happen to you. Check out our law firm's website to learn more about the estate planning steps you can take today. You've worked hard for your money, so it is well worth the time to meet with an attorney to understand how to protect your investments.
Source: Bellingtam Herald, "As it moved to seize home, bank never told widow her loan was insured," Kevin G. Hall, April 16, 2015