Most people have loans secured by property, many of these loans have been used for something else other than the property they are secured by. Example is borrowing against property A to buy property B. They will often make specific gifts of property in their wills, but leave no instructions in regards to the loans attached to the property. To combat this state legislation basically says any loan against a property must be paid out of that property, unless a contrary intention appears in the will. See s145 Conveyancing Act 1919 (NSW) for examplehttp://www.austlii.edu.au/au/legis/nsw/consol_act/ca1919141/s145.html In many cases this won’t be a problem, but where the deceased planned to leave a specific gift to different people it can create a huge problem. Example Imagine Dad has a son and a daughter. Dad has 1 property worth $1,000,000 with a $500,000 loan used to buy $500,000 CBA shares in the year 2000. The CBA shares are now worth $1.5million. · Property worth $1million with $500,000 LOC used for share purchases · Shares worth $1,500,000. The son wants the property and the daughter wants the shares. So Dad makes a simple will leaving each what they want. But he makes a fatal mistake (pun intended) and doesn’t comment on the loan in the will. He dies the next day after signing his will. The son will inherit the property with the loan having to be paid out of it - $500,000 net benefit. The daughter will inherit $1,500,000 worth of shares. The son is $1mil worse off than the daughter. (here leaving aside the tax issues there are also going to make further differences).