Payment of debt of decedent secured by property of another
When someone dies owing a debt that is backed by property owned by someone else, that debt usually gets paid from the dead person's estate like any other bill. But there are exceptions — like if the debt was used to buy or improve that property, or if the dead person never really got anything of value from the deal, or if the dead person meant for that property to be used to pay the debt after death. If the lender does not file a claim against the estate within three months of being notified, the person whose property is being used as security can ask the court to protect their rights and make the estate pay the debt instead.
473.290. Payment of debt of secured by property of another — procedure. — When any of a decedent is secured by , or other on property which is owned by another or which, on the death of the decedent, becomes the property of another, but is not subject to , the indebtedness shall be allowed and paid as other of the decedent unless it appears to the court that (1) the mortgage, pledge or lien was given to secure payment of the purchase price of the or of an incurred in connection with the improvement of the property, or (2) the decedent did not actually receive a substantial in the in which the indebtedness arose, or (3) the decedent had exclusive ownership and control of the property during his lifetime and it appears from the loan or mortgage agreement or circumstances surrounding the transaction giving rise to the mortgage, pledge or lien that decedent intended that the should be exhausted in case of his death before any payment thereon is made from his . If the of the does not institute proceedings for the and payment thereof against the estate of the decedent within three months after of notice of , then before the time for of expires the owner of any property given as security for an indebtedness under circumstances described in this section may the court for such s as are necessary for the protection of his rights and for the allowance of so much of the indebtedness against the estate as be sufficient to . Notice of on the petition shall be given to the or and to the holder of the indebtedness. After hearing the court may make such order in the as may be necessary to preserve the rights of the parties, including, if proper, an allowance of the against the estate.
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Source & history notes
(L. 1955 p. 385 § 114, A.L. 1963 p. 655)
Related Missouri laws
Disposition of valueless or encumbered property
RSMo 473.293
Encumbered property to be redeemed, when
RSMo 473.287
Title to real estate, how taken on such purchase
RSMo 473.283
Expenditures for preservation of property
RSMo 473.297
Continuation of business of decedent
RSMo 473.300
Purchase at foreclosure of mortgage held by estate
RSMo 473.280
Legal information, not legal advice. Always confirm with the official source at revisor.mo.gov.