Redraw availability after death of spouse, PPOR joint names

[Greg Reid]

Does anyone know if a PPOR loan paid significantly down due to super payout on expected death, whether those funds (in theory in redraw) are available to the joint party (spouse) after death?

It would have been advisable to have paid the funds into the offset but it was directed into the loan account itself.

 

[Terry_w]

Does anyone know if a PPOR loan paid significantly down due to super payout on expected death, whether those funds (in theory in redraw) are available to the joint party (spouse) after death?

It would have been advisable to have paid the funds into the offset but it was directed into the loan account itself.

Hi Greg

Technically death a breach of loan and the lender can call in the loan, but in practice they seem to keep the loan open for a while. They could freeze the amount on first knowledge of death - and they probably should - but as long as the loan is repaid they may not. But withdrawing money will effect the size of the estate so it would be wise not to suggest this to a client. Even if they are the beneficiary under the will there could be other issues.