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Old 11-14-2010, 05:37 AM
 
2 posts, read 13,066 times
Reputation: 16

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I found myself in the role of executor of my mom's estate who just recently passed away.

She did not have any money and does not own any property; thankfully she had a life insurance policy of $50k. After funeral costs and such I expect to have about $45k left. 15k for each of us.

My one sibling and I are going to put our inheritance to our student loans but my other sibling (sibling #2) has been unemployed for quite some time and has borrowed money from me and sibling #1. Sibling #2 wants to declare bankruptcy but also pay us back. Is there any problem with sibling #2 to give us our money then declare bankruptcy?

Also my mom had some outstanding loans but we are not liable for them. She really didn't have any possessions. I read that we do not have to pay these off. They can have whatever was in her estate (except pictures of course). What can I expect these companies to do?
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Old 11-14-2010, 06:28 AM
 
7,983 posts, read 11,673,230 times
Reputation: 10484
I can't imagine not paying off my mothers debt if there was any money available. Yuck.
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Old 11-14-2010, 06:41 AM
 
Location: Ohio
19,949 posts, read 14,256,616 times
Reputation: 16129
Quote:
Originally Posted by schnapster View Post
I found myself in the role of executor of my mom's estate who just recently passed away.
And you're obviously in way over your head.

Quote:
Originally Posted by schnapster View Post
After funeral costs and such I expect to have about $45k left. 15k for each of us.
Your expectations may be premature.

Quote:
Originally Posted by schnapster View Post
My one sibling and I are going to put our inheritance to our student loans but my other sibling (sibling #2) has been unemployed for quite some time and has borrowed money from me and sibling #1. Sibling #2 wants to declare bankruptcy but also pay us back. Is there any problem with sibling #2 to give us our money then declare bankruptcy?
No, because I seriously doubt that they would list that as a debt in their bankruptcy. If they did, and it was discharged, then they owe you nothing.

Quote:
Originally Posted by schnapster View Post
Also my mom had some outstanding loans but we are not liable for them.
No, you're not, but your mother's estate is, and you have an obligation to work those out. As I said, in your way over your head. I would seek the advice of a probate attorney (and no, it won't be free).

Her creditors may be able to lay claim to the life insurance policy, and a few other things, like her bank accounts etc.

Quote:
Originally Posted by schnapster View Post
She really didn't have any possessions. I read that we do not have to pay these off. What can I expect these companies to do?
Well, again, you personally are not liable for her debts, but her estate is. Obviously you have a conflict of interest here, and it may cause you some grief, unless you know what you're doing. I'd go talk to a probate attorney.

Besides, your mother may have had some form of insurance on the loan(s) which would pay them off in the event she died.
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Old 11-14-2010, 09:19 AM
 
Location: Victoria TX
42,663 posts, read 74,325,418 times
Reputation: 36087
Ordinarily, utility companies will just disconnect the service and blow off any past due or accrued charges. Although the estate is legally liable to pay them, they usually do not dun the grieving survivors. However, creditors like credit cards and bank loans will probably make an effort to recover any outstanding balances. The will (if there was one) would be required to specify that the first obligation of the executor is to pay all debts from whatever assets are present. But if there was no will, then the beneficiaries of the life insurance can tell the creditors that there are no available assets, and the creditor is likely to just classify the debt as uncollectable.

(The above is based only on my experience.)
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Old 11-14-2010, 12:51 PM
 
48,516 posts, read 83,999,418 times
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Basically has executor you have the responsiblity of settling nay debts under law. You need to get the will probated and the lawyer handling it will advise of your responsibilites and liabilites if not done .
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Old 11-14-2010, 01:05 PM
 
Location: southwest TN
8,225 posts, read 14,948,102 times
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Who is the owner of the insurance policy? Not who made the payments. IF the insurance is payable to the estate, then that money must be used to pay the debts. It is an estate asset. If the insurance is made payable to the 3 children, then it may not be an estate asset.

Also, were there any other signers on the credit cards or other debt your mother had? If there are, then those person(s) will be held liable for the debt if the estate does not pay it.

At the very least, consult with an attorney. Contact the local Bar Association (lawyers) and ask for the Lawyer Referral Program. There will be a series of questions asked of you to enable them to put you with an attorney specializing/knowledgable in the field you need - probate. In most parts of the country, this initial consultation (usually 1/2 hour) is a small fee, well below the current hourly fee.
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Old 11-14-2010, 01:13 PM
 
3,593 posts, read 10,693,990 times
Reputation: 5207
Quote:
Originally Posted by schnapster View Post
I found myself in the role of executor of my mom's estate who just recently passed away.

She did not have any money and does not own any property; thankfully she had a life insurance policy of $50k. After funeral costs and such I expect to have about $45k left. 15k for each of us.

My one sibling and I are going to put our inheritance to our student loans but my other sibling (sibling #2) has been unemployed for quite some time and has borrowed money from me and sibling #1. Sibling #2 wants to declare bankruptcy but also pay us back. Is there any problem with sibling #2 to give us our money then declare bankruptcy?

Also my mom had some outstanding loans but we are not liable for them. She really didn't have any possessions. I read that we do not have to pay these off. They can have whatever was in her estate (except pictures of course). What can I expect these companies to do?
You've gotten some good advise on here and some not so good advise. I'm not going to judge but just answer your question.

Life insurance is non-attachable to creditors. They cannot come after the beneficiaries (you and your siblings) for any life insurance. It is technically not considered part of the estate since it is beneficiary specific.

As executor, it is your responsibility to settle all debts of the estate out of any funds that are available. If your mother passed with no assets then the estate is considered insolvent and unsecured debts are considered uncollectable. Please note that if your Mom had a car that had a car note, that is considered a secured debt and the car either needs to be refinanced in someone elses name or returned to the lein holder.

Your sibling that wants to settle debts prior to bankruptcy should address their concerns with their bankruptcy attorney. Laws vary from state to state.

You didn't ask but I wanted to give you a few things that you should be sure as executor that you handle right away.
  • Contact Social Security and notify them of your mother's passing. It will safeguard her social security number so it can't be used by someone else through identity theft.
  • Advise all creditors (in writing certified signature return USPS) of your mother's passing. In this letter identify yourself as executor of the estate.
  • If your mother was receiving a pension, disability or health benefits, these organizations also need to be advised.
  • Please note that as executor, you are also responsible for filing your mom's final taxes (Federal, State and Local)
Finally, my sympathies to you for your mom's passing
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Old 11-14-2010, 03:17 PM
 
2 posts, read 13,066 times
Reputation: 16
Quote:
Originally Posted by Va-Cat View Post
You've gotten some good advise on here and some not so good advise. I'm not going to judge but just answer your question.

Life insurance is non-attachable to creditors. They cannot come after the beneficiaries (you and your siblings) for any life insurance. It is technically not considered part of the estate since it is beneficiary specific.

As executor, it is your responsibility to settle all debts of the estate out of any funds that are available. If your mother passed with no assets then the estate is considered insolvent and unsecured debts are considered uncollectable. Please note that if your Mom had a car that had a car note, that is considered a secured debt and the car either needs to be refinanced in someone elses name or returned to the lein holder.

Your sibling that wants to settle debts prior to bankruptcy should address their concerns with their bankruptcy attorney. Laws vary from state to state.

You didn't ask but I wanted to give you a few things that you should be sure as executor that you handle right away.
  • Contact Social Security and notify them of your mother's passing. It will safeguard her social security number so it can't be used by someone else through identity theft.
  • Advise all creditors (in writing certified signature return USPS) of your mother's passing. In this letter identify yourself as executor of the estate.
  • If your mother was receiving a pension, disability or health benefits, these organizations also need to be advised.
  • Please note that as executor, you are also responsible for filing your mom's final taxes (Federal, State and Local)
Finally, my sympathies to you for your mom's passing

Thank you NY Annie and VA Cat (especially you). She didn't really have anything to her name. She gave her car to charity when she couldn't drive anymore. That is the kind of person she was. One quick question, should I take control of her bank account and create estate account. She probably has less than $1k in there.....which won't even cover the funeral costs or is that a moot point? Should I just have the bank sign whatever remaining funds over to the funeral home? Thanks again.

Oh Giesela, you must be a princess and probably never have to worry about debt. Glad you can make comments about people you don't even know. I hope you end up being a single mom of 3 kids and have to work yourself to death.
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Old 11-14-2010, 03:32 PM
 
Location: MMU->ABE->ATL->ASH
9,130 posts, read 17,164,373 times
Reputation: 9982
Who signed the contract with the funeral home, Most likely you (as a person) not as executor did. Making you personal resposible for it. The 1K Should be move to the estate account - It will need its own tax ID from the IRS. The use it to pay her debts from it. From her Life Ins. (Assuming it was made to you and your sibs and not the estate) You can work out from your Sibs how to pay the funeral costs.
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Old 11-14-2010, 04:33 PM
 
20,793 posts, read 54,019,494 times
Reputation: 10530
Who was listed at beneficiaries on the life insurance plan, were you and your siblings all listed or just you? If it was just you, be careful giving them $15,000 each, that is over the gift tax limit and the excess will be subject to gift tax. It isn't much individually but YOU would be responsible for that tax and it will eat up a good chunk of YOUR inheritance. If need be, put the extra into an account and gift the rest to them NEXT year (which, being that it is Nov. will be easy enough to do in Jan).
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