Transfer by Affidavit-Right to Offset Loan

We have a situation where we have a deceased account holder who had a sole-owned savings account and a car loan.
A family member of the deceased is presenting the bank with a transfer by affidavit to be able to access the funds from the savings account. We are unaware if the family member knows that the loan exists.
My thoughts are that due to the transfer by affidavit, there will be no estate. How are we going to get our loan paid if there is no estate to compel to pay? Are we allowed in this instance to offset the balance of the loan with the savings account?

bump

I'd be running that either by WBA Legal or your attorneys before making any move.

Not an attorney, but the affidavit includes:

By accepting the decedent’s property under this section, I assume a duty to apply the property transferred for the
payment of obligations according to priorities established under §859.25, Wisconsin Statutes, and to distribute any
balance to those persons designated in the appropriate governing instrument, as defined in §854.01, Wisconsin
Statutes, or if there is no governing instrument, according to the rules of intestate succession under ch. 852,
Wisconsin Statutes.

So tell them of the obligation. There is no privacy issue. If they don't pay the obligation, then the bank can sue them. They have to act no different that a court appointed trustee of an official estate.

Thank you both for your responses. Much appreciated!