car loan after death

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My father recently died. My mother was left with a car and loan that was soley in his name. She wants to let the car go back to the lender, but is being told by the lender that she is now responsible for this loan. She has not transfered the car through probate yet, because at that point in the state of SC she will be responsible for inheritance tax. To me it sounds simple, tell the lender- sorry the deceased will no longer be making payments on this vehicle, you may want to come take ownership of it. Basicly my question is: Is she forced to inherit this vehicle?

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No, the estate is responsible for the debt through the probate process. Have the executor liquidate the vehicle and pay ... (more)

delzy (Jan. 18, 2008 @ 2:39p) |

I find it amusing that there are people that think estate law is such a simple, straightforward thing. Tell me this, wha... (more)

WalStMonky (Jan. 18, 2008 @ 2:44p) |

I could be wrong but I dont see OP mention any other assets although probate IS mentioned. If the other assets were join... (more)

mwarrior (Jan. 20, 2008 @ 1:01p) |

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klosier said: My father recently died. My mother was left with a car and loan that was soley in his name. She wants to let the car go back to the lender, but is being told by the lender that she is now responsible for this loan. She has not transfered the car through probate yet, because at that point in the state of SC she will be responsible for inheritance tax. To me it sounds simple, tell the lender- sorry the deceased will no longer be making payments on this vehicle, you may want to come take ownership of it. Basicly my question is: Is she forced to inherit this vehicle?I am reasonably certain that the lender is just trying to avoid having to take possession of the car.

Glitch99 said: klosier said: My father recently died. My mother was left with a car and loan that was soley in his name. She wants to let the car go back to the lender, but is being told by the lender that she is now responsible for this loan. She has not transfered the car through probate yet, because at that point in the state of SC she will be responsible for inheritance tax. To me it sounds simple, tell the lender- sorry the deceased will no longer be making payments on this vehicle, you may want to come take ownership of it. Basicly my question is: Is she forced to inherit this vehicle?I am reasonably certain that the lender is just trying to avoid having to take possession of the car.

communal property?

write an email to tips@consumerist.com and emberass the hell out of the lender.

klosier said: ...Basicly my question is: Is she forced to inherit this vehicle?IANAL, but I don't think she has much choice. In most states, the two members of a marriage effectively own everything communally. I'd be very happy to be corrected tho - it would be interesting if it were possible to 'accept' inheritance of assets but not of debts....

There's also typically no inheritance tax in a transfer between members of a marriage.

That said, if you really don't want the car, you're prolly on the right track. Unless there's a LOT of money at stake, the lender will likely just take the car and go away....

your first 2 answers were good, the third was off-track!

j/k

State laws play a huge part of this.

In California two married people can and do have separate bills yet we are a community property state.

Example - If this was in California and the loan was only in the Father's name, the mother could tell the Car loan company to come pick up the car and stop harassing a widow.

Other states - check your local laws. They vary too much for a quality answer to this question.

What does the loan contract say? Is your mom in a community property state?

kenblakely said: klosier said: ...Basicly my question is: Is she forced to inherit this vehicle?IANAL, but I don't think she has much choice. In most states, the two members of a marriage effectively own everything communally.huh? are you talking about community property? if so, keep in mind that CP only exists in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin,

I am not certain, but I do not think south carolina is a community property state.

Technologist said: your first 2 answers were good, the third was off-track!

j/k
See? That's why IANAL - Donno doodoo about property laws in states !Texas, and can't figure out how to post only once....

chrishaw said: What does the loan contract say?...

Check the contract for clauses/options/insurance for death. You may still owe taxes if the loan is forgiven.

but I don't think she has much choice. In most states, the two members of a marriage effectively own everything communally.

What are you talking about? The minority of states are community property states. In MD I'm responsible for my own debts, period. Funny how so many believe that debts transfer to a not responsible party as a matter of course just because people are married. Unless this is in a community property state, the lender is full of it. I won't speak to CP states rules as I'm not in one, and I know they're different.

not sure what the contract says, but I will look at it.

Would the assets of the estate come into play, or is that sheltered since they were married?

Is the car upsidedown?
If not have the executor sell the car and put the proceeds into the estate.

i.e. Liquidate the asset in probate....

So where are all the lawyers this morning?

The property and the debt are two different things. HE owned the car, so somebody inherited it (hint - NOT the bank). As for the debt, sure, the bank has a lien on the car, but the estate (not your mom) is responsible for payment. You can't just say no payments will be made, so come get your car (can you?).

I love when people only want to inherit one part of an estate. You inherit assets and debt. If debts exceed assets you owe nothing, if assets exceed debts PAY THE DEBT WITH THE ASSETS. Inheritence taxes are a part of life. Pay your taxes and be happy with what is left.

The lender can always come after the estate if there are assets.

dmlavigne1 said: I love when people only want to inherit one part of an estate. You inherit assets and debt. If debts exceed assets you owe nothing, if assets exceed debts PAY THE DEBT WITH THE ASSETS. Inheritence taxes are a part of life. Pay your taxes and be happy with what is left.

The lender can always come after the estate if there are assets.


Exactly. You can refuse it all but you can't simply make liabilities vanish.

LorenPechtel said: dmlavigne1 said: I love when people only want to inherit one part of an estate. You inherit assets and debt. If debts exceed assets you owe nothing, if assets exceed debts PAY THE DEBT WITH THE ASSETS. Inheritence taxes are a part of life. Pay your taxes and be happy with what is left.

The lender can always come after the estate if there are assets.


Exactly. You can refuse it all but you can't simply make liabilities vanish.


If it's not your liability, it never existed to vanish.

Uh huh, ponder that one.

The lender could go after the estate if it was worth it. The vehicle would be sold at auction after the lender takes possession, and the estate could owe the difference. If there is equity, I'm not sure what would happen. You could transfer the loan to someone, or if it's a lease assume the lease.

High school must be off today by the looks of these answers. The function of the probate is to apply the assets to the liabilities and then disburse any remaining assets.

Who is the executor of the estate? Is the value of his estate positive or negative? If negative, let it go, if positive, sell the car. (this assumes a non-community property state)

Sorry to be so blunt at your time of loss, but this stuff is really not rocket science and just a few details are needed to correctly answer the questions. If you don't trust anyone to help your family, at least pay a lawyer by the hour to walk you through it.

Who owns the house? Are there other lienable assets?

You know this interweb thing is great, but it's not quite as good as the Bat Computer.

klosier said: Is she forced to inherit this vehicle?
No, the estate is responsible for the debt through the probate process. Have the executor liquidate the vehicle and pay the remaining due from the estate, or the excess to the estate. Then there will be no vehicle to inherit .

dmlavigne1 said: I love when people only want to inherit one part of an estate. You inherit assets and debt. If debts exceed assets you owe nothing, if assets exceed debts PAY THE DEBT WITH THE ASSETS. Inheritence taxes are a part of life. Pay your taxes and be happy with what is left.

The lender can always come after the estate if there are assets.


I find it amusing that there are people that think estate law is such a simple, straightforward thing. Tell me this, what happens if all assets pass outside the estate? You are aware there are ways to make this happen, right? When the lender arrives, the cupboard is bare.

Inheritance taxes are actually a part of death, and only for a very small % of people. Most estates never get anywhere near the overcoming the deduction. But WTF do inheritance taxes have to do with it anyway?

I could be wrong but I dont see OP mention any other assets although probate IS mentioned. If the other assets were jointly held, then it could be that the father's name comes off (no tax) of the existing property.

If the vehicle is the ONLY item that is left that is part of the estate, then tell the lender to come get it.

A credit card company tried coming after somebody once because he was an authorized user on his mother's credit card. Mother filed bankruptcy, credit card company goes "You owe us the money because you were an authorized user". Keeping in mind he never used the card even once, let alone during bankruptcy period



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