You can better protect your heirs if you take into consideration that your mortgage might outlive you.
If you inherit a house you can end up with problems because it is often assumed you can continue the mortgage payments or refinance with the lender but, unfortunately, neither is the case in all situations. And, as the Wall Street Journal points out in "What Happens When a Homeowner Dies Before the Mortgage Is Paid?," inheriting a house with a mortgage can be problematic.
A federal law does restrict when a lender can cancel a loan due to death, but only if very specific conditions are met.
The harsh reality is that the rules vary widely about continuing a mortgage after the homeowner passes away. Lenders are often free to enforce their own policies, which are usually buried in the fine print of the mortgage documents. The good news is that when most lenders are informed of a homeowner's death, they are willing to be patient before beginning foreclosure proceedings as they understand that legal requirements often get in the way of fast processing.
When you get a mortgage it is a good idea to ask the lender about what will happen if you pass away before the mortgage is paid.
An estate planning attorney can help advise you on your options should you inherit a home.
Reference: Wall Street Journal (April 6, 2016) "What Happens When a Homeowner Dies Before the Mortgage Is Paid?"