Q: My mother passed in July. She designated me as the beneficiary of a payable on death account, but she also owes car loan
I would like to know if distribution of the funds are contingent on satisfaction of the loan. A petition to probate has been filed and the credit union can procure funds from my the sale of my mom's non exempt assets. Can I demand that they distribute the pod funds in a check and simply repossess the vehicle. Any outstanding balance can be procured from the estate, correct? Pod account should not be subject to the credit unions car lien
A: It all depends entirely on the wording of the loan agreement. While the loan us an estate obligation, if your mother secured the loan with her accounts at the credit union, then it might be that the account is pledged as security for the loan. You might be able to demand repayment from estate if credit union takes your money.
A: You ask an interesting question, and I believe that Mr. Hughes is correct that the loan agreement is pertinent. Also, the account agreement may be pertinent. Assuming that the credit union is the lender and the entity with which she had accounts, it is possible that your mother and the credit union had an agreement which permits the credit union to offset her accounts to pay indebtedness owed by her to the credit union. If there is no such agreement and if the credit union does not otherwise have a security interest in the accounts, then it is possible that the loan should be paid from the residue of your mother's estate if she had a will, or if she did not have a will, then from the assets of her probate estate. A definitive answer to your questions depends on a number of facts, and I recommend that you consult with a probate attorney.
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