[WSBAPT] Commercial Loan Due-on-Sale at Death

[Paul Grant]

A client passed away with a commercial building and there is a loan
attached to it.  The loan was taken in the name of the LLC and was not
personally guaranteed by the decedent or the surviving spouse.  The terms
of the loan clearly state that the death of any member is a default.

Has anyone seen a commercial loan, if being timely paid, trigger the
default provision and demand the loan to be paid in full at the death of a
member?  I have a hard time believing that they would recall the loan if it
is currently paid, but sometimes commercial loans are a different creature
and do things that make no sense.

The surviving spouse is living in terror that the bank is going to demand
the loan to be paid and I have no experience in dealing with commercial
loans to help calm her.  Thoughts on commercial loans and any suggestions
on the next step - I really don't want to be surprised.

Thanks!

Paul H. Grant - JD, LL.M

Planning with Purpose, Inc
Lynnwood, WA 98036
425-939-9948
www.planningwithpurposeinc.com

Estate Planning. Business Planning. Wealth Succession.
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