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BC
05-07-2004, 06:40 PM
Hello,

On June 25, 2003 my wife's father passed away. In his will, he left
land that he owned to his three surviving daughters. The will being
used for probate is dated January 30, 1998 and it clearly states the
intention for the real property to pass to the three daughters.

In the estate inventory, the heirs discovered that their father had
used the property to secure a bank loan for about $100K in 1993, and
that the original note was ammended from time to time in the years
thereafter.

We recently received a letter from the decedent's surviving spouse
(evil step mother) indicating that a balloon payment will be due on
June 1 for the remaining outstanding balance of the loan--about $40K.

Although evil step mother has continued making the payments--as
exectutor she had no choice---she now indicates that she has asked the
bank holding the note if the estate can make an intertest only
payment, not the balloon pay-off, since the property is soon to be
re-titled to the heirs. She indicated in a letter that after tallking
to the loan officer, the bank most likely would allow this.

Her intent to pass the debt on to the beneficiaries is based on the
fact that the note was entered into prior to the establishment of the
will and that the will contains no language indicating that the
property is to pass to the daughters "free of encumberance, etc."

My question is this: Is there anything we can do to slow down the
closing of the estate by a month or two or more? By slowing down the
closing could we not force the estate to pay off the loan, assuming of
course that the bank holding the note demands full payment in the
month(s) following the interest only payment?

If successful, a stalling manuever could save us the $40K.

BTW--evil step mother will walk away with close to $1Mill in very
liquid assets. Note that the survining heirs only stand to get the
property and do not have the $40k needed to pay off the loan. Most
likely, the $40K debt would force the heirs to immediately sell the
property.

Any ideas or advice would be greatly appreciated.

Thanks

Tam
05-10-2004, 04:36 AM
bcurran@toad.net (BC) wrote in message
news:<8eeo909vmpkc3k375j8an38lrsegdk9av5@4ax.com>...


My question is this: Is there anything we can do to slow down the closing of the estate by a month or two or more? By slowing down the closing could we not force the estate to pay off the loan, assuming of course that the bank holding the note demands full payment in the month(s) following the interest only payment?

You have to get an interpretation of the will by the probate judge.
This should be easy to do. The status of the estate is fixed (absent
law or will provision to the contrary) on the date of death, not the
close of probate. In some states (NY comes to mind) real property
passes, subject to liens, at death.

I can think of arguments on both sides in your case. Only an
examination of law and precedent in your own state and county can
resolve your case. For that reason, the daughters would be well
advised to consult a local probate specialist rather than trying to do
it themselves and relying on the judge to do the research. He might
just prefer to rely on the analysis of the evil stepmother's lawyer,
who represents the estate.

Dan Evans
05-12-2004, 04:59 AM
On Fri, 07 May 2004 21:40:33 -0400, bcurran@toad.net (BC) wrote:

On June 25, 2003 my wife's father passed away. In his will, he leftland that he owned to his three surviving daughters.
In the estate inventory, the heirs discovered that their father hadused the property to secure a bank loan for about $100K in 1993, andthat the original note was ammended from time to time in the yearsthereafter.
My question is this: Is there anything we can do to slow down theclosing of the estate by a month or two or more? By slowing down theclosing could we not force the estate to pay off the loan, assuming ofcourse that the bank holding the note demands full payment in themonth(s) following the interest only payment?If successful, a stalling manuever could save us the $40K.

I very much doubt that you have the *right* to delay a distribution
from an estate.

And it's quite possible that your premise is wrong, and that stalling
will not save you anything.

In at least some states, a specific bequest of property does NOT
require the estate to pay any mortgage on the property, and title to
real property passes (in theory) at date of death, so that the
mortgage debt because the responsibility of the devisees at death.

So you should consult with a lawyer in your state who is familiar with
your state's probate laws in order to get a reliable answer to your
question.


*Dan Evans
*Author of the Tax Protester FAQ
*http://evans-legal.com/dan/tpfaq.html

Guest
05-14-2004, 04:22 PM
On Wed, 12 May 2004, Dan Evans <dan@evans-legal.com> said in pertinent
part:

[ a poster said/asked: ]
[father's will left identified real property to daughter without will saying whether bequest was/wasn't subject to or to be free of liens. executrix step-mother, also a beneficiary of the estate, and deceased daughters learn the deceased had used property before he drafted his will to secure a still outstanding at death bank loan, and the survivors are now bickering whether the estate should/shouldn't satisfy that lien ] [I]t's quite possible that your premise [trying to use delaying tactics in the expectation that the executrix will feel constrained to yield] is wrong, and that stallin will not save you anything. In at least some states, a specific bequest of property does NOT require the estate to pay any mortgage on the property, and title to real property passes (in theory) at date of death, so that the mortgage debt because the responsibility of the devisees at death. So you should consult with a lawyer . . . .

Those who presumptively would agree with Mr. Evans' characterization
of what "in at least some states" is so with respect to some will
provisions, _if_ those provisions are considered standing alone
without regard to what else the will might provide, nonetheless might
wonder about _how_ the poster's question and all so far publicly
posted responses thereto have been formulated may affect proffered
answers:

Mr. Evans is correct (in/for "at least some states) that a specific
bequest of real property does not neccessarily require an estate to
satisfy a mortgage thereon. But even so, the OP seemed also to have
said that the particular lien to which he referred was created as
security for a personal personal bank loan to or, anyway, a personal
debt incurred by the deceased and yet the OP has not said in his
posting whether (as Mr. Evans would acknowledge is very common even if
not uniform) the deceased's will also directed the executrix to pay
the deceased's outstanding debts (and/although, if so, from what
portion of the estate).

If, however, there were such a provision, not formulating the OP's
question in terms of whether the executrix complied with her
will-directed duty to pay the deceased's outstanding debts compared
with narrowly focusing as the OP apparently did only on the question
whether the will did not explicitly contain "free of all liens" or
"after first satisfying the mortgage thereon from other estate assets"
language in the real property disposition provision referred to and
then also formulating the more general question in terms of whether
the principle Mr. Evans refers to generally applies where the estate
is being administered might be misleading.

If, undoubtedly, he would attend to the noted distinction if he were
given the complete will and all the other relevant facts, it
nonethless is quite possible that Mr. Evans' apparently implied
premise above therefore is also quite wrong if he means to suggest
thereby that the probably only applicable principle, and pertinent
will provision, will be the comparatively narrow one whether "a
specific bequest of [real] property does NOT require the estate to pay
any [sic] mortgage" thereon.

Which is exactly why no one ought question Mr. Evans' suggestion that
the OP consult a lawyer for estate-specific advice in light of what
the will in question read as a whole actually says (something the OP
has not actully reported) in light of the particular state's law (the
OP also didn't answer the "Where?" question).

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