Q: I was my dad’s POA and he passed in June. He had no will. He has a house that is falling down, and I want nothing to do with it. I received a bill for $4,000 from his nursing home. Am I responsible for this? (Cranberry Twp., PA)
A: You are correct, the POA no longer has legal effect. If you didn’t sign the contract for his nursing care, I would not pay it. However, be advised, that PA has adopted filial responsibility which extends liability for nursing home care services provided to indigent persons to certain family members. I do not see nursing homes use this cause of action in my practice however it does exist. I would not pay the bill and let the nursing home explain why you are personally liable. The debts of a deceased persons are the debts of his or her estate. Speak with an attorney about the necessity of opening an estate for your father. It sounds like it may not be advisable.
Q: Mother accrued a lot of medical bills throughout her lifetime due to illness. She didn’t own anything but a vehicle and some personal belongings so her estate will not have much to pay back her debt. Her estate would mainly be medical bills prior to her getting on Medicare and Medicaid. Will her kids be responsible to pay those bills now that she has passed? Can they garnish our personal assets? (Beechview, PA)
A: Generally, person A is not liable for person B’s debts when person B dies, unless person A signed as a guarantor on a contract. However, PA does have a filial statute that holds next of kin liable for the debts of an indigent family member. However, in my practice, I have not seen it enforced. You may or may not want to open an estate. I would consult with an attorney with whom you can share all the facts before making that decision.
Q: Father passed away 2/22/17 (predeceased by our mother who died in 2002). The only assets would be a 2012 Jeep Patriot with $5,000 still owed, and a home with an $18,000 mortgage balance in a depressed area. There was a $7,000 life insurance policy which went entirely to pay for funeral, with three children also paying about $1,000 each towards funeral. Basically, we already know there are more debts than assets, and are hoping to avoid having to pay estate fees, etc., but we are not sure if an attorney is necessary or what we are required to do. (McKeesport, PA)
A: You would need to open an estate if you want to transact his property-sell his house and transfer any other asset in his name. The question you are facing is, is it worth the time and expense to do this, given the fact that it looks at this point to be an insolvent estate? I would need to know more of the details to properly advise you. However, I have advised clients over the years to walk away from situations like this. The home will just go to Sheriff’s sale. There is a chance that the taxing bodies-school and borough especially, could sue for a deficiency judgment in the tax sale. Although it is rare, I have seen that happen. I would gather all your information-statements, bills, the deed, the mortgage documents and consult with a local attorney.
Q: My mother passed and my sister is the executor. There was an IRA that was split between us. I gave my half to my sister to pay debts and taxes. The total in debts that I know of are close to what was in the IRA after taxes were paid. There later was revealed a pension that was left to only me. If the total debts exceed what was in the IRA does the pension that was left to me then become part of the estate to pay these debts or would tangible items then need to be sold off by the estate to pay these additional debts? (Greentree)
A: I do hope you have an attorney to guide you through this. Generally, assets such as IRA’s, pension plans, insurance policies, and annuities with living beneficiaries are not considered to be part of the estate. They are often termed “non-estate” or “non-probate” assets. Only assets held in the name of the decedent only, comprise estate or probate assets. A creditor to whom money is owed can file a claim against estate assets once an estate is opened. However, such creditor generally cannot reach these non-probate assets. I would need to know what other estates and debts exist to advise if it is warranted to even open an estate. If an estate is opened and insufficient estate assets exist to pay estate expenses and debts, the estate is considered to be insolvent and creditors would be paid so many cents on the dollar. In that case, the estate may need to be closed by the filing of a First and Final Account. Bear in mind, you and your sister will need to pay inheritance tax regardless if an estate is opened or not. You really need to sit down with an attorney and have him or her look at all assets, debts and expenses before an informed opinion can be given.
Q: If I paid for my car with cash and I owe no money on it, can the state take it to pay my credit card debts when I die? I have credit card and student loan debt.
A: If you died and an estate was opened, all of your debts would become debts of the estate and would be paid in an order which favors certain debts over others. Funeral expenses, administration costs, attorney’s fees, certain medical bills and inheritance tax and income taxes are given preference. Unsecured creditors are then paid with what is left. If there is money remaining after all expenses are paid, then the heirs are paid. Your car loan is an unsecured debt. The lender would need to file a claim with the court. If there was money remaining to pay, the lender would be paid. As for your student loan, if you die before it is paid, the balance is forgiven.
Q: Who has to pay for a contract signed by the co-owner of a joint account after he dies? The co-owner of a joint account has signed a contract shortly before he dies. The invoice was received after his death. Does the invoice for such a contract have to be paid from the joint account by the surviving co-owner or from the (probate) estate of the deceased? The joint account was set up by the deceased so that his bills can be paid in case he becomes incapable.
A: I will answer this the way I understand it the question. Generally, the joint account should have nothing to do with the contract. Unless, there was some weird agreement in the contract that it was to be paid from the joint account. When a person dies, property held in their name only, become an asset of their estate. Debts and bills for services provided to them in their name only, are now debts of the estate. Jointly held property, is not part of an estate. If you are the joint account owner with the dead person, the account balance passes to you by operation of law upon his or her death. The joint account surviving tenant can liquidate the account and close it. He or she will need to pay inheritance tax on the deceased’s person’s half.
Q: My mother gave me permission over the past 2 years to use her credit card and I have paid faithfully every month assuming the debt as my responsibility. Just recently my mother passed away. I immediately contacted the card company and they said the debt can’t be transferred to my name, that it has to be turned into the estate. My family is up in arms and is now trying to get me for embezzlement, which my mom allowed me to use her card with her permission and she gave me the statement each month when it came in the mail for me to pay. Please help me with this matter. I know a time or two my mother has had the card company on the phone and told them that it was ok for them to talk with me about the card. But not sure if she actually had my name listed with the card company to us.
A: This isn’t the first time this has happened. If the creditor files a claim against the estate, the estate attorney can put them on notice that certain debts will not be honored by the estate as they were not your mother’s expenditures or your mother did not authorize them. The attorney can win this argument as long as he has proof, which you would assist him with, i.e., a statement from you, copies of all of the statements which show items that an older woman would not purchase, i.e. i tunes, designer jeans, concert tickets, etc. just for an example. If you acknowledge these debts and are capable of paying them , there should be no problem. If you cannot afford to pay them now, the credit card company is unlikely to separate them out from your mother’s debts. I am sure the credit card company wants the estate to be obligated as it is easier to be paid than suing you, I am assuming. I would tell the estate attorney where you stand .