[WSBAPT] Who Pays Debt on Vehicles?

[Roger Hawkes]

Without knowing the language of the gift, I would assume the giftee takes subject to the loan.  A will could say otherwise: i.e. “all debts and liens payable from the residue” or words to that effect.

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Inge Fordham
Sent: Wednesday, July 7, 2021 4:08 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Who Pays Debt on Vehicles?

Colleagues,

Hypothetical.  An estate has 0 liquid assets to pay debts or expenses of estate administration.  The estate assets are comprised of real property, vehicles, and other tangible goods.  Decedent’s will leaves all vehicles to John Doe and the residual to John Green.  There is an auto loan against a vehicle in the amount of $10k.  Does John Doe take the vehicle subject to the $10k loan (i.e., the gift is essentially one of equity in the vehicle and John Doe is responsible for the debt owed) or is John Green responsible for paying the debt (as the residual beneficiary)?

Thanks,


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