A home mortgage is in the name of a deceased spouse, who left no will. Surviving spouse did not have the mortgage changed to her name when her husband died in 2001. She has just paid out of bankruptcy, which was in her name only. The house was not included in the bankruptcy. She has been making on time monthly mortgage payments all this time, and has received a 1098 each year, with her husband's name and social security number (not hers) on the mortgage interest statement. Is she entitled to take the home mortgage interest deduction on the federal and state schedule A? Also, what does she need to do to clear up the matter of ownership? The property in question is in the state of Alabama.
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Under the laws of every state I know of, if a person dies without a will, state inheritance laws give the estate property to the closest living relative. That would be the surviving spouse if the decedent was married at the time of death.
Therefore, the surviving spouse in your case is the true owner of the house. Since the mortgage company holds a lien on her property, she is entitled to a deduction for mortgage interest paid, even though the name on the mortgage has not changed. If it were an unsecured debt, that might be a different matter. But I’m sure a mortgage company is going to hold a lien on the property that is mortgaged. -
As to clearing up matters of ownership, see an attorney.Comment
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