Disclaimer: This article does not provide legal advice. It offers general information about South Dakota law to help you make informed decisions. Consult a qualified attorney for advice about your specific situation.
Under SDCL §29A-3-708, a personal representative must pay valid claims against the estate before distributing assets. (Link: https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Section=29A-3-708)
Detailed Answer
When an estate administrator repays a decedent’s vehicle loan, the administrator must confirm full satisfaction under South Dakota law. Follow these steps:
- Obtain a written payoff statement. Contact the lender and request a payoff statement or demand letter. This document breaks down principal, interest, fees, and any prepayment penalties. It sets a deadline for payment and states the exact amount due.
- Make payment and document it. Pay by certified check, wire transfer, or another traceable method before the payoff deadline. Keep the cleared check image or wire confirmation as proof.
- Receive a lien release. After processing your payment, the lender must issue a lien release or complete the lien block on the vehicle title. Under SDCL §32-3A-65, the secured party must provide this release to confirm termination of its security interest. (Link: https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Section=32-3A-65)
- Record the release with the DMV or county. Submit the lien release and title application to the South Dakota Department of Revenue or your county Register of Deeds. This step updates the vehicle record and removes the lien.
- Verify title status. After recording, request a duplicate title or title history from the DMV to confirm that the lien no longer appears. You can check online at the South Dakota Department of Revenue motor vehicles page: https://dor.sd.gov/motor-vehicles/
- File UCC termination statement if needed. If the lender filed a Uniform Commercial Code financing statement, it must file a termination statement under SDCL §54-9-513. Request a copy to confirm the public record shows the lien’s termination. (Link: https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Section=54-9-513)
- Maintain thorough records. Keep copies of all payoff statements, payment confirmations, lien releases, title documents, and correspondence. These records protect you if questions arise about the loan payoff.
Helpful Hints
- Ask the lender to send payoff statements in writing—email or mail—to avoid misunderstandings.
- Pay by traceable methods and obtain receipts with the lender’s stamp or signature.
- Track deadlines carefully; lenders often set short payoff windows.
- Follow up with the DMV within 30 days after payment to ensure the lien release registers.
- Store documents both digitally and physically, labeling them clearly in your estate file.
- Consult an estate attorney if you face delays or disputes with the lender.