Yeah, no that whole clip is just a joke. That’s not at all how it works. You don’t inherit debt unless you cosigned a loan or it’s spousal debt in one of those common property states.
When someone dies, you tally it all up, debtors get paid out of the estate in a certain order of precedence, if the money runs out, the money runs out. If there’s money over, it gets divvied up according to inheritance laws of that state.
Also, importantly, debtors cannot touch things like life insurance payouts or retirement accounts that have beneficiaries named. Those are not part of the estate and they can’t touch them.
That is incorrect. If your grandmother left you the house, as in she put your name on the deed as transfer on death, it is not part of the estate and you would get it outright. It would not be affected by the debt.
If you’re saying there’s a million dollars remaining on the mortgage on the property, of course she can’t just give it to you, it’s still collateral for that mortgage. It’s not hers to give.
If it was paid off, but part of the estate and subject to the rules of inheritance, then it would be affected by other non-mortgage debt.
US Federal estate tax does not count until it’s above $13.99 million per individual. In this example, unless it is a huge property, it would not be subject to inheritance tax.
I think I cut off of $13.99 million is more than adequate and only taxes those who can afford it.
I’m in the process of directly inheriting something like 200k in various savings and retirement accounts along with a half million dollar life insurance payout, and there are zero taxes on any of that.
I’m also taking over the deed on a house with $300k mortgage remaining - of course I have to keep paying that mortgage. That’s not inheriting debt. I could turn around and sell the property immediately and get paid the difference between the remaining mortgage balance and sale price.