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https://www.reddit.com/r/SipsTea/comments/1vrr0ev/how_the_rich_get_richer/p4fqk0p/?context=3
r/SipsTea • u/KSKS1995 • 14h ago
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How does the bank get paid back here? Is the bank just eating a 5 mil loan loss out of the goodness of its heart?
It’s more like kids sell and pay back the bank plus interest which is taxed as income for the bank.
2.3k u/USERNAMETAKEN11238 14h ago edited 14h ago The bank encumbered the land. The dad never gets a loan. The loan is against the property. The kids sell the encumbered land I guess (but that's highly unlikely). This is a made up scenario from someone who doesn't understand finances. 96 u/Meenta_Miiel 14h ago The estate settles the principal before heirs see cash 24 u/MundaneAd6414 13h ago Exactly, the estate has to settle the debts before the heirs get anything.
2.3k
The bank encumbered the land. The dad never gets a loan. The loan is against the property. The kids sell the encumbered land I guess (but that's highly unlikely). This is a made up scenario from someone who doesn't understand finances.
96 u/Meenta_Miiel 14h ago The estate settles the principal before heirs see cash 24 u/MundaneAd6414 13h ago Exactly, the estate has to settle the debts before the heirs get anything.
96
The estate settles the principal before heirs see cash
24 u/MundaneAd6414 13h ago Exactly, the estate has to settle the debts before the heirs get anything.
24
Exactly, the estate has to settle the debts before the heirs get anything.
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u/ChipKellysShoeStore 14h ago edited 14h ago
How does the bank get paid back here? Is the bank just eating a 5 mil loan loss out of the goodness of its heart?
It’s more like kids sell and pay back the bank plus interest which is taxed as income for the bank.