Niko Villamor

Wills are important if the person who made the will (the testator) owns real estate with unpaid mortgages. For example, if you own a house and lot worth P5 million with P2 million left on the mortgage, savings accounts, stocks, bonds and a life insurance policy and you left the house and lot with an unpaid mortgage to your daughter with the balance of your estate going to your spouse, does this mean that your child will get the house with or without the mortgage? Your daughter will get the house and lot with the obligation to pay for the mortgage unless you specified in your will that the mortgage will be paid by your estate. Without this clear instruction for the executor to pay the mortgage from the proceeds of your estate, your child would have to pay for the balance of the mortgage. If your daughter fails to pay the mortgage, the bank (the mortgagee) will file a lawsuit to foreclose the property, rendering your child without any asset protection device to preserve the real estate interest you passed on to her.