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Barrister
Barrister, Attorney
Category: Estate Law
Satisfied Customers: 33769
Experience:  15 yrs estate law, real estate. Wills/Trusts/Probate
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I have two questions. If someone dies and that person has

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I have two questions. If someone dies and that person has a note receivable outstanding, how can the note payoff be handled? Must it be paid off right away or can it be paid off over time? If over time, would it be paid to the estate, or to some other entity such as a separate bank account? Second, if someone creates a trust but does not transfer all assets into it, what happens? The assets involved are checking accounts, a Treasury note, and some annuities. Thank you.
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If someone dies and that person has a note receivable outstanding, how can the note payoff be handled? Must it be paid off right away or can it be paid off over time? If over time, would it be paid to the estate, or to some other entity such as a separate bank account?
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This would depend entirely on the terms of the note. If the note has set payment terms and a set duration, then the debtor would just make payments to the estate of the deceased creditor. The estate would essentially "step into the shoes" of the creditor and become the owner of the note. Once the estate was settled, then the note would transfer to whoever inherited the assets of the estate.
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Second, if someone creates a trust but does not transfer all assets into it, what happens?
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If the grantor has funded the trust with some assets, then those assets are under the ownership and control of the trust and are managed according to the terms of the trust. If there are assets left outside the trust, and the person didn't have a "pour over will" that directed that anything left outside be put into the trust, then those assets would just be in the deceased's estate and would either descend according to their will or by default state law if they had no will.
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Barrister
Customer: replied 3 years ago.

When the note receivable is paid directly to the estate, how exactly is that done? Does it require that a separate bank account be set up for the loan payments to be made to?

When the note receivable is paid directly to the estate, how exactly is that done? Does it require that a separate bank account be set up for the loan payments to be made to?
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There should be an executor of the estate of the deceased who is in charge of administering and settling the estate. As part of that job, the executor should open up an estate bank account to accept any payments that would be made to the estate on the note. It is from this account that any disbursements would be made and any other bills would be paid.
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Thanks
Barrister
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