Deceased car with lien question

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Latest post 04-14-2010 5:10 PM by Drew. 2 replies.
  • 04-14-2010 5:05 PM

    • Buji
      Consumer
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    • Joined on 04-14-2010
    • VT
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    Deceased car with lien question

    I am the Executor of my godmother's estate.  She has a car with a lien on it.  [The finance company] said that I have three options:

    (1) Make an offer to buy the car, (2) A family member can take over the payments, (3) I can turn the car back ove.

    My brother is interested in making an offer to purchase the car (not interested in assuming the $319 current loan payment).  I have given [the finance company] my permission to discuss the offer with him.  The loan balance is currently $12,500.  Kelly Blue Book shows the value at $11,000.  My question is -- will the Estate be liable for any "loss" incurred by selling the car to my brother for less than the loan balance?  Or, a similar scenario - if I turn the car back over to them and they sell it at an auction for less than the loan balance, can they make a claim to the Estate for the loss? 

    Thank you, in advance, for any responses.

     

  • 04-14-2010 5:10 PM In reply to

    Re: Deceased car with lien question

    Buji:
    My question is -- will the Estate be liable for any "loss" that incurred by selling the car to my brother for less than the loan balance?

    Absolutely, positively, yes.

    The estate owes the entire balance. The estate will have to make up the difference whether you sell it or turn it back to the lender.

    Otherwise, the finance company will just not release the lien and is likely to repo the car if there is a default. Or will sue the estate for the balance and the money will have to come out of other assets.

    Buji:
    Or, a similar scenario - if I turn the car back over to them and they sell it at an auction for less than the loan balance, can they make a claim to the Estate for the loss?

    Yes.

    And you, as executor, have a fiduciary obligation to act in the best interests of the estate, not the best interests of your brother.

    So if you mess up on the car deal, the remaining unpaid balance could come out of your pocket if another heir litigates against you for malfeasance.

    Be very careful how you handle this.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 04-14-2010 5:10 PM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on 03-30-2000
    • PA
    • Posts 49,590

    Re: Deceased car with lien question

    Yes, the estate stands to be liable for any shortfall for any of godmothersw debts--so a lowball sale to brother could backfire UNLESS the note holder in writing cancels/satisfies the debt --why does taking over the loan payment not make sense to brother ?  One way or another estate seems to owe $12,500 unless you as executor can cut a better deal--your  call.



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