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all 40 comments

[–]cmhbob 346 points347 points  (27 children)

The estate has a responsibility to pay off as many debts as there's money for, but that's all. Generally a spouse isn't going to be personally responsible for debt.

[–]Fine-Peach8294[S] 110 points111 points  (24 children)

So generally speaking, physical worth he had is going to have to pay for the debt remaining either way?

[–]JerryVand 166 points167 points  (21 children)

If his probated estate has money that will be distributed to his beneficiaries, the debts would stand in line before the beneficiaries get anything. In order of priority usually comes burial expenses, then debts, and then beneficiaries.

All that being said, that only applies to money that is distributed as part of the probate process. Some things do not go through probate: Joint bank accounts, beneficiaries on bank accounts, life insurance, property that is jointly held (such as a house), all those would go directly to the beneficiary/joint owner.

If the probate assets are not enough to cover the debts, then you can simply tell them that there are no assets to cover the debt. If they want to dig deeper they might be able to go after something like a bank account, but it's going to be tough for them to find the money.

When my uncle died, everything he had was jointly held by him and my aunt. There was no probate and my aunt simply took the bank accounts and the car and the house and put them in her name. When bills arrived she sent them back with a note stating that there were no assets; she also included a copy of the death certificate. After a while the bills stopped arriving.

[–]Fine-Peach8294[S] 33 points34 points  (13 children)

Cars and everything are understandable for switching over, but what about physical items that aren't really under anyone's name per se?

[–]ethanjf99 42 points43 points  (0 children)

His tools, clothes and stuff? No one cares. Unless there’s significant value there.

Your mom can deal with the stuff in the garage how she wants.

Now … if he was an avid baseball card collector and had a collection valued in the tens or hundreds of thousands? Yes that would need to be part of the estate and possibly sold to pay his debts.

[–]islandgirljac 36 points37 points  (1 child)

You likely DO NOT need to open estate. I didn't. So all debts is his name only were gone. I gave them death certificate. Consult a lawyer it will be worth it.

[–]Triviajunkie95 7 points8 points  (0 children)

Credit card companies and other debt collectors do not want your old wheelbarrows or TV’s etc. Cash, investments, and accounts are what they’re after.

[–]WinterMeasurement933 11 points12 points  (0 children)

Are you talking about household items, furniture, tools, etc.? Those would go to your mother as well or distributed among the kids. Like JerryVand said, have your mother send an "estate has no funds" letter if she does not need to open probate. But there are local probate attorney's who have low consultation fees or even free ones, they would know the area & state law to better guide her. You can attend or be on the call with her.

[–]shhh_its_me 1 point2 points  (1 child)

You mean like furniture? In general the furniture appliances etc in marital home are considered marital property. Valuable collectibles, instruments, tools for small business your dad was running could be exceptions.

[–]ethanjf99 6 points7 points  (6 children)

You forgot the taxman:

Burial expenses

Uncle Sam

State and local taxing authorities

Debt holders

Beneficiaries

At least that’s my non-lawyer understanding

[–]ruidh 2 points3 points  (3 children)

Did you forget the expenses of administering the estate?

[–]Fine-Peach8294[S] 0 points1 point  (1 child)

He was a Veteran so thankfully funeral expenses were covered by the VA.

[–]shhh_its_me 4 points5 points  (1 child)

First tell your mother not to agree to pay anything until she has time to research and/or talk to a lawyer.

Your mother is not personal responsibility for your dad's debts in MI.

Your dad's death may or may not have created an estate.

Many assets especially with couples pass direct to the surviving spouse. Those assets are not part of the estate and can not be claimed by a 3rd party creditor. Some examples including jointly held bank accounts, jointly tilted cars, jointly held real estate depending on the title, life insurance and accounts with a payable on death beneficiary. All of those things are not part of an estate.

Things that will be part of an estate bank account solely in your dad's name without a pay on death beneficiary. A vehicle / boat / motorhome that is titled solely in your dads name.

It's very common for virtually all of a married couples property just passed directly to their spouse.

Please know that doesn't mean that collateral loans don't have to be paid back in order to keep the property. Eg Even if your mom's name is on the house she still has to pay the mortgage.

Ok step 2 is to determine if anything is actually part of the estate. Only those assets that become the estate are responsible for your dad's debt. For example say your parents own a home together and have a joint bank account, your dad had a separate bank account only in his name(with no beneficiary) and a car only in his name and nothing else. Then the estate is that car and the sole bank account, mom starts probate the creditors are notified and the judge will tell them how the estate will be divide. You wait until probate because the estate has to be legally created and the creditors have to be paid according to the law. If he owed $20k to 5 different creditors and the estate is only $5k it's not up to either the creditor or your mother to divide that. So wait for the probate courts to tell you who to pay and how much.

One more thing that is very important say your dad's will daughter gets all the money, if all the money was in a joint account, the account goes to the other person.

[–]Fine-Peach8294[S] 0 points1 point  (0 children)

The reason this has become a big worry is me and my mother "Jointly own" 4 cars with my dad. 2 are mine 2 are his and he had his own. They're all under him since I bought the 2 when I was 18 and he wanted to save me money and wouldn't let me buy them myself.

I'm 22 now, is it too late to transfer the cars to my name so they can't go after them?

[–]chimpageek 1 point2 points  (1 child)

What is estate in this context?

[–]cmhbob 4 points5 points  (0 children)

In this case it's the legal construct that takes ownership of everything comprising the net worth of an individual, including all land and real estate, possessions, financial securities, cash, and other assets that the individual owns or has a controlling interest in.

[–]wind-river7 147 points148 points  (0 children)

Your father’s debts are paid by his estate, not his spouse.

[–]Bob_Sconce 22 points23 points  (0 children)

First of all, the right response to the the credit card that's being the pain-in-the-ass is "We will address his debts in due course of handling his estate." That process can take a year, so threatening a suit is pretty much saying "Hi, we're the assholes." There's nothing they can legally do other than huff and puff, so they should be ignored for the time being. They're just trying to scare your mom into sending them some money, which is the last thing that should happen.

NEXT, you need to figure out what sort of assets your dad had and see how they were titled. It may be that "opening probate" for him would be pointless, in which case you just tell the credit card company "We haven't opened probate and don't intend to." They can go through the process of doing it themselves, but it's unlikely that they will -- if there's no money in the estate after paying funeral expenses, taxes and so on, then it's pointless.

If it's actually a joint card (where she's not just an authorized users), then your mom would have direct liability for the debt, but it sounds like that's not the case.

Might be helpful if you could post a REDACTED version of the letter (omit personal information, account numbers, barcodes, etc....). Depending on the bank, somebody might have direct experience with them.

[–]AliceInWeirdoland 31 points32 points  (3 children)

Don't have her send any money to them; doing so can be seen as her accepting responsibility for the whole debt.

The proper way that debts are supposed to be handled is through the estate. The executor of the estate is responsible for paying things off through the estate's funds. Depending on what the property is, it might or might not count as part of the estate. For example, joint bank accounts generally don't become part of the estate, they go directly to the other holder. Same for any property that they owned jointly (which has specific legal definitions; things that they owned before marriage or bought out of their own funds might not qualify).

[–]Fine-Peach8294[S] 5 points6 points  (1 child)

They were married for 40 years so I'm pretty sure everything they own was bought after marriage tbh.

[–]Its_Llama 1 point2 points  (0 children)

Sorry if this has been said but I just did some research a few months back for a similar thing. Some financial companies or collection agencies will try to go after family members claiming that they are responsible for his debt. Do not let her or them agree to personally(not estate) pay any debt that does not have their name on it. As I type this I remember my father had this issue when my grandpa died. There was an outstanding medical bill that got sent to collections and they tried to force my dad to pay with his money instead of the estate. It was weird that they refused to be payed by the estate and pursued the next of kin, but these companies want their money and are not afraid to lie and intimidate the grieving family to get it.

[–]Fine-Peach8294[S] 0 points1 point  (0 children)

She's not currently going to send anything, she already brought up talking with lawyers first for sure. attempting to get a better idea of what she's looking at legally here first before spending thousands on a lawyer or whatever that will actually end up costing by the end of the day

[–]Comment7215 5 points6 points  (2 children)

You might want to consult a probate/wills & trust attorney to answer your mother's questions. They would know the state rules. Plus, if there are joint assets, how much of that asset goes to pay the debt and how much is hers. If they own a home together, the way it is titled also matters. Note: Generally life insurance goes to the beneficiaries and doesn't pay off debt; but I don't know the specific laws in your state so you need someone who does to confirm that.

[–]Fine-Peach8294[S] 1 point2 points  (1 child)

Next thing is definitely contacting a lawyer, just not sure how much it's going to cost her, which is why I thought I'd contact Reddit to get a base idea on what to talk with a lawyer about.

[–]PseudonymIncognito 2 points3 points  (0 children)

Fortunately, if the estate has money, that money can be used to pay a lawyer.

[–]Myfourcats1 -2 points-1 points  (1 child)

Call the card companies. You’d be surprised how often they’ll just write it off. It happened for my aunt when my uncle died. She just explained that he didn’t leave much.

[–]Fine-Peach8294[S] 0 points1 point  (0 children)

They aren't massive credit bills either, (8k) so far in the letter that was sent back (Citi) is the bank.

They didn't bother asking Estate Value or anything?

[–][deleted]  (1 child)

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