Two people are in a joint tenancy with rights of survivorship, and it is given by one of the joint tenants as security for a loan, without the knowledge of the other joint tenant. Suppose that the joint tenant dies after defaulting on the loan. Who is the rightful owner of the CD in question, the tenant or the creditor?
Under the laws of most states, the pledge of the CD as security takes precedence over the co-owner's interest in the account. The creditor gets to take what it needs to pay off the loan, and surrender the balance, if any, to the surviving co-owner.
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Under the laws of most states, the pledge of the CD as security takes precedence over the co-owner's interest in the account. The creditor gets to take what it needs to pay off the loan, and surrender the balance, if any, to the surviving co-owner.
