Legal Question in Wills and Trusts in Maryland
my father in law passed away on December 31, 2010, he owned a 2003 Cadillac that was paid off but he took out a loan of $5000 and used the car as collateral. The car is worth more than the collateral loan, and the estate is going to probate? Car was left to my wife? Question is if we continue to pay the monthly payments for the loan, would there be a chance that if there is any equity in the car that the state would take the car, pay the loan off and than take the $1500 of equity to pay off other debt. I don't want to make payments for 5 - 6 months only to have the car taken from underneath us(my wife and I)
1 Answer from Attorneys
The short answer to your question is Yes.
The long answer is that whether or not the car's equity would go to pay debts of the decedent depends on how much is in the estate and what debts/obligations exist. Maryland law gives a priority for paying off debts of an insolvent estate. You may want to contact a local attorney for more information based on the specifics of your situation.
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