For a loan owed to an estate, is the amount due the balance at estate settlement or do interest and late charges continue to accrue until paid?
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For a loan owed to an estate, is the amount due the balance at estate settlement or do interest and late charges continue to accrue until paid?
My mother died years ago with the estate left to all her children. The estate included a loan to one of the children. A deed of trust on the borrower’s house exists stating terms of the loan (interest, late charges, and schedule). The estate has been settled by MD law, but the loan has not been repaid. The borrower is not disputing the terms of the loan. hat is owed at this date? Is it the loan balance at the date the estate was settled? Or have interest and late charges continued to accrue over the years since the estate was settled so more is owed?
Asked on June 2, 2011 under Estate Planning, Virginia
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
This is a very difficult question to give any guidance on here as one needs to read the documents involved - all the documents - from the Will to the deed of trust. How they are written matters. And there is not information as to how much of the loan was repaid. If you are asking if the interest.late charges and schedule of payment stopped when your Mother passes away the answer is no, they did not. The Persoanl Representative of the estate (probably an executor here) had the right and obligation to continue to collect on the loan after your Mother's death. And the child who is the debtor continued to have the obligation to pay, unless the Will forgives the loan upon her death. Take the documents to an attorney to review. Good luck.
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