Dying with debt.

[Iluvatar]

My father passed away on Wednesday and I've been trying to figure everything out. He had been on dialysis for a little over 5 years and in and out of the hospital a large portion of the last 2 years. This is leading me to believe there will be a large amount of medical debt. I do not have any of his bills in my possession but I'm sure I'll be hearing about them soon.
The only assets my father had at the time of his death were his car that he had just purchased for $800 and his record album collection. He rented his house and did not have a bank account of any kind.

Question 1: What should I do with the car (will the car be seized to pay on the debt or will I need to sell it to pay on the debt)?

Question 2: It's looking like there was life insurance and my sister and I are named as the beneficiaries. Is it possible that this money will be used to settle any debts my father had or is this money excluded from his estate?

I know this seems cold asking about money after my father passed but the funeral expenses are costing me a small fortune.
That's all I can think of for now. Any other info that applies would be greatly appreciated.

Thank you.

 

[JasonSnake]

I would think that his debt is not legally yours and you should not worry about it. They would probably be written off once the creditors saw the death certificate.

The funeral costs, on the other hand, would probably be your deal. Hopefully the insurance will be enough.

About his car, well, being that it's barely worth the hassle of being seized, it may end up being yours to sell but I don't know much about that.

 

[PowerWheels]

His estate will go through probate, any assets will be sold if necessary to pay the bills. This happens before any relatives receives any remaining portion of the estate if anything is left, in this case sound like there is nothing. You do not inherit any debt, period. If someone asks for money from you tell them to **** themselves.

 

[s_x_i]

His estate will go through probate

Not necessarily...

Probate is generally only used in Testate Succession.


OP - I'm sorry to hear about your father.

The creditors on the debt will normally attach it to any assets of the Estate, however I don't know the laws in your state. The debts will not transfer to you or any of your fathers heirs at law.

As for the life insurance, I'm not sure - you and your sister are beneficiaries, however, dependent on the language, the policy terms and a host of other caveats, the policy could very well be viewed as an asset of the Estate.

As much as I'd like to try help you, I'm not familiar with the laws outside of Texas. You really need to gather up all the documentation you can and talk to a family law attorney specific to your state. :read:

 

[BLK03SVT10TH]

I would think that his debt is not legally yours and you should not worry about it. They would probably be written off once the creditors saw the death certificate.

The funeral costs, on the other hand, would probably be your deal. Hopefully the insurance will be enough.

About his car, well, being that it's barely worth the hassle of being seized, it may end up being yours to sell but I don't know much about that.

My Father has told me that Creditors will hound you to pay, but you are under no obligation to do so, and you don't want to even make a single payment or they could argue that you have assumed his debts.

 

[fiveohhhstang]

Do you know if your father had any kind of medical insurance or if he was on Medicaid?

 

[mysterio]

Lot of good info here. One of the most important things to understand is the laws on estate planning vary from state to state. You probably should consult someone in your state.

Also, it's one of the oldest (and dirtiest) tricks in the book that creditors make adult children think they're liable for their parents' debt. In most cases, they are NOT. As others have said, in most cases it goes to the estate.

I've been in financial planning for many years, and have heard countless horror stories about adult children getting harassed by creditors when the parent(s) passes away. Don't take those creditor scumbag's word, get some credible advice in your state.

 

[Iluvatar]

Thanks for the advice and he was on Medicaid Molly.

 

[mysterio]

Before I forget, sorry to hear about your loss OP.

And Jasonsnake, debt isn't always 'probably written off,' as you said. A creditor might choose to do this, depending on the size of the debt. But the normal course of action is for them to file a claim against the estate.

 

[FordSVTFan]

My father passed away on Wednesday and I've been trying to figure everything out. He had been on dialysis for a little over 5 years and in and out of the hospital a large portion of the last 2 years. This is leading me to believe there will be a large amount of medical debt. I do not have any of his bills in my possession but I'm sure I'll be hearing about them soon.
The only assets my father had at the time of his death were his car that he had just purchased for $800 and his record album collection. He rented his house and did not have a bank account of any kind.

Question 1: What should I do with the car (will the car be seized to pay on the debt or will I need to sell it to pay on the debt)?

Question 2: It's looking like there was life insurance and my sister and I are named as the beneficiaries. Is it possible that this money will be used to settle any debts my father had or is this money excluded from his estate?

I know this seems cold asking about money after my father passed but the funeral expenses are costing me a small fortune.
That's all I can think of for now. Any other info that applies would be greatly appreciated.

Thank you.

The question no one asked is: Did he have a will? If so, the will directs how his assets are allocated. As noted by s x i, the estate is responsible for debts before the assets are distributed, whether according to the will or intestate succession.

If there is life insurance and you and your sister are the named beneficiaries then this is a non-probate asset and goes directly to you and your sister before creditors.

I would think that his debt is not legally yours and you should not worry about it. They would probably be written off once the creditors saw the death certificate.

The funeral costs, on the other hand, would probably be your deal. Hopefully the insurance will be enough.

About his car, well, being that it's barely worth the hassle of being seized, it may end up being yours to sell but I don't know much about that.

You are correct the debt does not belong to the kids unless they agreed to it. A creditor will not write off the debt just because they see a death certificate. They will attempt to recover their debt from the estate first.

His estate will go through probate, any assets will be sold if necessary to pay the bills. This happens before any relatives receives any remaining portion of the estate if anything is left, in this case sound like there is nothing. You do not inherit any debt, period. If someone asks for money from you tell them to **** themselves.

Why would his estate go through probate? Did he die intestate?

Not necessarily...

Probate is generally only used in Testate Succession.


OP - I'm sorry to hear about your father.

The creditors on the debt will normally attach it to any assets of the Estate, however I don't know the laws in your state. The debts will not transfer to you or any of your fathers heirs at law.

As for the life insurance, I'm not sure - you and your sister are beneficiaries, however, dependent on the language, the policy terms and a host of other caveats, the policy could very well be viewed as an asset of the Estate.

As much as I'd like to try help you, I'm not familiar with the laws outside of Texas. You really need to gather up all the documentation you can and talk to a family law attorney specific to your state. :read:

Excellent advice. :beer:

 

[01svtL]

Whatever you do, don't make a payment on it until you have a definite answer, no matter what they tell you on the phone. They are lying scumbags, and any payment of any kind will be an admission of debt owed.

 

[oldmodman]

Also, beware of sudden surprise medical bills showing up several years later. After my mother died and I had closed out her estate quite a few bills started showing up two or three years later. They were from Dr's she had never seen.
I turned all the bills and her death certificate over to the District Attorneys office, informed all the doctors that I was doing so and never heard another thing.

 

[Iluvatar]

There was no will. This is part of the reason I'm so confused. I'm not sure what to do with his belongings since I know the creditors will want to recoup the debts owed to them. I'll probably just have his car towed to my house since I can't leave it at the rental property. I can just let it sit here until I get whatever paperwork is going to be sent to me.

 

[fiveohhhstang]

If he was on Medicaid they probably covered nearly all of his medical bills. The boys were on Medicaid when they were born and their 380,000 dollar hospital bill was covered in full. Of course that doesn't take care of any other debt he may have had, but I wouldn't worry too much about medical bills unless you are certain he had a large amount he owed.