All About Estates
By Tamar Silverbrook
August 8th, 2025
Are you planning to leave real estate to a loved one under your Will? Do you want that property to be transferred free of debt or other claims? Language matters!
For example, consider the terms “encumbrance,” “financial encumbrance,” and “mortgage or charge.” These terms are not interchangeable:
- Encumbrance:
This broad term includes any right to or liability in the property held by third persons, such as charges or liens. It may be non-financial, such as easements or encroachment agreements. - Financial Encumbrance:
This term includes liens, charges, mortgages, and other financial claims in the property. - Mortgage or Charge:
Beyond traditional mortgages, this term also encompasses any financial security registered against the property for securing money, such as a home equity line of credit secured against the property.
Using one term over another may change how the debt or liability attached to the Property is satisfied by your estate. This may impact the interest the Beneficiary receives in the Property and perhaps the value of your remaining estate available for other beneficiaries.
Different terms may sound similar but have differences with significant impacts. Your estate planner’s understanding of the nuances, and the language chosen in drafting your Will, is crucial to achieving your intentions.
