Intentionally die with debt

[climbskiscope]

Consider a hypothetical situation where I have metastatic cancer, I’m comfort care and will reliably die in several months, but am still decisional. I own my house. Would I be able to
1. Take out as big of a home equity loan as possible
2. give all assets, my house, and the loan money to charity
3. laugh from the afterlife when the bank tries to collect from my now empty estate upon death

[EntrepreneurMD]

Robin Hood.

[CordMcNally]

Consider a hypothetical situation where I have metastatic cancer, I’m comfort care and will reliably die in several months, but am still decisional. I own my house. Would I be able to
1. Take out as big of a home equity loan as possible
2. give all assets, my house, and the loan money to charity
3. laugh from the afterlife when the bank tries to collect from my now empty estate upon death

I'm confused. How is the bank out any assets? You can't give your house to charity since you don't own it. They used your house as collateral and now own your house and I guarantee you they didn't give you more money than your house was worth. It's a bit more hassle to them now that they have to sell your house, though, if that's what you were going for.

[Random1]

I dont think you will be able to give away the house if you dont have the deed to the house.

[climbskiscope]

I guess I don't understand how HELOC works then - while you carry the loan the house belongs to the bank even as you live in it?

What about instead

1. Take out a mortgage as big as I can and buy a house
2. gift all assets and the house to charity. If I can't gift the house, I'm pretty sure I'm allowed to sell it. And I can sell for $1.
3. die

Quick googling says that banks can't discriminate based on age for mortgage purposes, so I'd prob be able to get one.

[CordMcNally]

I guess I don't understand how HELOC works then - while you carry the loan the house belongs to the bank even as you live in it?

What about instead

1. Take out a mortgage as big as I can and buy a house
2. gift all assets and the house to charity. If I can't gift the house, I'm pretty sure I'm allowed to sell it. And I can sell for $1.
3. die

Quick googling says that banks can't discriminate based on age for mortgage purposes, so I'd prob be able to get one.

*puts face in palm*

[Anne]

This thread is reminding me of the time someone told me they thought that when they got their first checkbook they could just write a check for whatever they wanted.

It doesn’t work that way.

[spiritrider]

Have you been binge watching Shameless or is that you Frank?

[climbskiscope]

Cord McNally seems like a fun and instructive colleague to have

[spiritrider]

You don't seem to understand that even unsecured debts must be paid from probate assets.

Even worse, how can you think you have any availability to give away or sell property with a lien.

[burritos]

I think you're better off getting a crap load of credit cards. Buy a bunch of stuff. Give it to said charities. Then die.

[climbskiscope]

Probate assets would be zero

Aren't houses with mortgages on them routinely sold?

[CordMcNally]

Cord McNally seems like a fun and instructive colleague to have

Allow me...

I guess I don't understand how HELOC works then - while you carry the loan the house belongs to the bank even as you live in it?

If you have a loan on something such as a house or vehicle, you don't actually own that item, the bank does. That's why vehicles get repossessed legally by their rightful owner. That's why a home goes into foreclosure.

What about instead

1. Take out a mortgage as big as I can and buy a house

You have every right to do this.

2. gift all assets and the house to charity. If I can't gift the house, I'm pretty sure I'm allowed to sell it. And I can sell for $1.

You can gift all the assets you own to charity. You don't own the house. You have to have a clean title to sell the house. In order for someone to buy your house for $1, you'll have to simultaneously satisfy the mortgage (which you don't intend on doing) so the bank won't release their lien and they'll still own your house. You ever try to buy or sale a car with a lien on it? The note has to be paid off before the title is released to the new owner (meaning that even if someone gave somebody money for the property, they still don't own it without the title).

3. die

That's your perogative.

Quick googling says that banks can't discriminate based on age for mortgage purposes, so I'd prob be able to get one.

Banks don't care how old you are. They only care about how much you're wanting to borrow and how much the house is worth (along with if you can reasonably make your payments).

[Nysoz]

Consider a hypothetical situation where I have metastatic cancer, I’m comfort care and will reliably die in several months, but am still decisional. I own my house. Would I be able to
1. Take out as big of a home equity loan as possible
2. give all assets, my house, and the loan money to charity
3. laugh from the afterlife when the bank tries to collect from my now empty estate upon death

You own a house that's $1M.

1. You take out a HELOC for $800k - So you don't own the house free and clear anymore because you're using the house as collateral for the loan.

2. Give away the $800k

3. Bank owns the house and sells it to get their money back

[climbskiscope]

Cord Mcnally, thanks! I learned something today