Any Bankers on here?

[TomG2]

Some of my Senior Single friends purchase RV's on the "Thousand dollars down and twelve years to pay it off" plan.

My question is, "What happens when they expire three years into the twelve year contract?"

I am not posing a moral question, or judging their wisdom. I only wonder what is the mechanism that the lending institutions usually follow in this situation? I do not need to be told that the loan was stupid or that they should have paid cash. Just the reality of what is likely to happen. My hypothetical scenario includes no surviving spouse, adult children who have no use for a RV, and a relatively small estate.

What happens when my camping buddy goes to that big campground in the sky before paying off his camper?

[Mr_Mark1]

I was the lucky or unlucky person to be responsible to be the Executor of 4 Estates. Having a degree in Accounting, I was elected. I told them never again after the last one.

Thank goodness all of the Estates were debt free, just a lot of taxes to our favorite relative, Uncle Sam.

I had a friend who for some weird reason bought a piece of land in Costa Rica before she died. The property is in a very remote and unsaleable area (easily). The property had to be 'separated' from the regular Estate so that the Estate could close. The property is still in 'never never land'. They can't even give it away. Crazy situation.

Every situation is different as are the family dynamics.

Safe travels and make sure your will is in order.

MM.

[time2roll]

If you transfer the house to the kids too soon they also get the original cost basis and will pay more tax when sold.

Pretty sure the max gift per person is $14k for 2017. That is max without filling out the form to declare the amount goes against the lifetime exemption.

[sayoung]

Bumpyroad wrote:

afidel wrote:

pnichols wrote:
If the old geezer owns a house, they should always buy an RV by opening a small mortgage on their house to pay just for the RV. Mortgage money has the lowest interest rates and of course can be borrowed against a 30 year payback.

An old geezer can't get any lower monthly RV payments than that.

Actually if they're smart they've transferred the home to a trusted child so that it's not considered an asset, either of the estate or for Medicare nursing home purposes. Transferring a home before the Medicare lookback process is one of the best ways to transfer wealth to your kids.

but they would run into that $10,000 rule, or it was 10K in my experience for "gifting". also, are the state/feds going to ignore that increase in value from $7,000 when purchased to $500,000 now?
bumpy

Its now $20K per year so you just give a fraction each year but add to the deed a " life estate" clause which can be done here in Tx. A lot of trouble to gift property over a long period. Just sell it to them for $10 & consideration.
When I took the car back the relative actually had more assets but they were all in his mothers name , +he was a single parent of 2 kids & NO friggin life insurance. Luckily for me I had a paid off buried policy & some plots , at least one problem was easy.

[Bumpyroad]

afidel wrote:

pnichols wrote:
If the old geezer owns a house, they should always buy an RV by opening a small mortgage on their house to pay just for the RV. Mortgage money has the lowest interest rates and of course can be borrowed against a 30 year payback.

An old geezer can't get any lower monthly RV payments than that.

Actually if they're smart they've transferred the home to a trusted child so that it's not considered an asset, either of the estate or for Medicare nursing home purposes. Transferring a home before the Medicare lookback process is one of the best ways to transfer wealth to your kids.

but they would run into that $10,000 rule, or it was 10K in my experience for "gifting". also, are the state/feds going to ignore that increase in value from $7,000 when purchased to $500,000 now?
bumpy

[Bumpyroad]

DownTheAvenue wrote:

Lwiddis wrote:
Well, Down, sorta in California. Debts are paid in a specific order - see Probate Code Section 11420. A vehicle loan is in class (7). Way down the line.

I thought I was clear, the assets of the estate pay any remaining debts. If the assets of the estate do not cover all the debts, then anything left is just written off by the creditor. It doesn't matter in what order the debts must be paid. Again, DEBT CANNOT BE INHERITED. There is no, "sorta in California..."

I don't see a problem with the quoted section. all that is stated is that there is a pecking order for who gets their money due first.
bumpy

[DownTheAvenue]

Lwiddis wrote:
Well, Down, sorta in California. Debts are paid in a specific order - see Probate Code Section 11420. A vehicle loan is in class (7). Way down the line.

I thought I was clear, the assets of the estate pay any remaining debts. If the assets of the estate do not cover all the debts, then anything left is just written off by the creditor. It doesn't matter in what order the debts must be paid. Again, DEBT CANNOT BE INHERITED. There is no, "sorta in California..."

[afidel]

pnichols wrote:
If the old geezer owns a house, they should always buy an RV by opening a small mortgage on their house to pay just for the RV. Mortgage money has the lowest interest rates and of course can be borrowed against a 30 year payback.

An old geezer can't get any lower monthly RV payments than that.

Actually if they're smart they've transferred the home to a trusted child so that it's not considered an asset, either of the estate or for Medicare nursing home purposes. Transferring a home before the Medicare lookback process is one of the best ways to transfer wealth to your kids.

[Grit_dog]

Idk if loan forgiveness is prominent with secured loans, but this was in the height of the recession, in 09 and I think the CC companies were just happy to get something back.

[Grit_dog]

mich800 wrote:
I am surprised. I thought based on our average age here more do not have experience dealing with an estate after a loved one has died. Grand parents, great grandparents etc.

I know. At 45 I've already had the (dis) pleasure of being an executor or personal representative. RIP mom n dad.....
Answers are correct. Creditors go after the estate.
On that note, you CAN negotiate with creditors if you got a good poker face. Sparing the details, my sister and her baby daddy basically scammed mom out of all her retirement savings within the year before she passed. Like couple hundred thousand.
Mom was carrying huge credit card debt when she died. That was how they were doing it. They'd max out her cards monthly, she'd withdraw investment money to pay off.
The curent bills were about $30k between 2 cards. Not enough cash left to plant mom and pay off, but her estate was very liquid.
They called me almost immediately after her death. (They had my number from calling and canceling the cards). Demanded 100% payment.
I told them to f their hat 3-4 times. Threats of leins ensued. Then I lightened up and offered to pay them a percentage of the total as a free and clear payoff. After a couple rounds or negotiations, I settled with both for an avg of about a half of the total.
Saved me $15k!

The bluff was the house, which they could lein. Told them go ahead, I planned on keeping it forever and passing it down to my kids. Either take some money now or wait until my kids inherit it and talk to them. Btw they were like 2 and 5 years old at the time!

[TomG2]

sayoung wrote:
I had to handle an estate back in 99 that only had one asset, a fairly new corvette bought on that 0 down ****. He knew he had terminal cancer
After trying to sell it before the next payment, realized it wasn't happening with enough $ to satisfy loan. Contacted GMAC & just took it back

That was nice of GMAC and that is what my buddies hope for. I am sure it depends on the amount of the remaining loan. The problem I see with the various scenarios is that there is no incentive for the lending institution to get top dollar for the repo if they can get the loan paid off by the estate. It appears that they could dispose of Bill's $100,000 RV for $25,000 and tap the dead guy's estate for $75,000 if that is the balance.

Please do not think that I am in any way trying to beat the bank out of their loan or any other unpaid bill of the deceased. I just wondered what the mechanism would be. I may play campfire lawyer this winter with my friends.

[TomG2]

Paul1944 wrote:
Most likely in this situation the bank would require that the borrower purchase credit life insurance that will pay the remainder of the loan in the event of death.

You must not be an old geezer. Payoff insurance is seldom, if ever, offered after a certain age. Somewhere around seventy.

[sayoung]

I had to handle an estate back in 99 that only had one asset, a fairly new corvette bought on that 0 down ****. He knew he had terminal cancer
After trying to sell it before the next payment, realized it wasn't happening with enough $ to satisfy loan. Contacted GMAC & just took it back

[Paul1944]

Most likely in this situation the bank would require that the borrower purchase credit life insurance that will pay the remainder of the loan in the event of death.

[time2roll]

Bumpyroad wrote:
if a "life" "DOH" annuity ends with death, it provides no real value in this situation. I thought that some of them had a minimum that they would yield however, so there could be some excess which would be lost???
bumpy

The value according to the OP scenario is to hit the end totally broke and never fully pay for the RV. To maximize your monthly annuity payment there would be no residual. It would be a risk you take but you would never run out of money. If you want to leave some money you can buy some life insurance that is paid direct to the beneficiary and does not get mingled in the estate.