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I am appointed executor for my mother's will. She may have a few thousand left if she lives that long, but all her accounts have all siblings listed as equal beneficiaries. So if there are outstanding bills, expenses, or debts, how do I take care of my legal obligation to pay those off if the financial institutions pay on death directly to the beneficiaries?

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Do the POD funds pay out standing debts including funeral cost etc?
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my sister and I were beneficiaries on my uncle bank CD POD we were also co executers she took complete control and shut me out I did not become aware that the CD's were left to both of us by the time I found out she had cashed them in and took $46,000 cash. What can I do now
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From the wills and trusts that I've seen and worked on at law firms, there typically is a clause that final expenses of the last illness are to be paid first. I haven't checked our own documents recently, but plan to raise with our attorney the issue of extending that clause to cover not only expenses of any last illness but also of disposing of the house, property and other significant assets (trailer, etc.). This would mean that no distributions are made to heirs until the property is disposed of.

This is important to me because I need to make sure that there are funds for that purpose specifically and that no one gets any bequest until that happens. I want it right there in the documents in black and white so there are no challenges if someone wants his/her share first.

You mentioned 3 categories: final expenses (which should be covered as first expenses if you had an attorney prepare your will or trust), real estate and income taxes. I believe, but would have to check our documents as well as do a little bit of research, that taxes are addressed as well in the clause about payment of final expenses, as it's the responsibility of a trustee or personal representative (formerly known as executor or executrix) to ensure that all taxes are in fact paid before closing the estate.

This definitely is a question and request for an attorney to ensure that the will and/or trust are prepared properly to cover this need. I agree with AK that making assets payable to the Executor could be misconstrued, and even though I assume you trust your Executor, there's no guarantee that the funds will be used for the specific purposes you want.

I think also that this could really complicate administration of the estate.
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You may want to consult at attorney about this. If you make the assets POD to "the executor of the estate", that could be interpreted to be a personal payment to the executor for his or her work on your estate. You could also make the beneficiary "the estate", in which case the executor would need to provide proof of his or her appointment as executor to the bank in order to access the assets. The assets would be used by the executor to pay expenses and any funds remaining would need to be distributed according to the will.
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My wife and I want to keep some bank CD's from being immediately paid out to
POD beneficiaries at our deaths, so that my executors can pay final expenses, real estate and income taxes that undoubted ly will be due. May we set up some
asets with the executors being beneficiaries for this purpose?
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You have to send in the request for the death certificate. If you will talk to your state or county's vital statistics office, they will tell you where to mail your request and how much money to send.
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I WAS LEFT POD BY MY FRIEND OF 30 YEARS,SHE DIED AND I AM NOT BLOOD RELATED,CANT GET DEATH CERTIFACATE,VITAL RECORDS IN SANTA FE NEW MEXICOSAID GET A HEAD LETTER FROM BANK,BANK REFUSES TO GIVE ME ONE,HOW CAN I GET A DEATH CERTIFACATE,CERTIFICATE,THATS ALL I NEED TO GET THE FUNDS,WHAT CAN I DO?
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I learn a lot from some subscribers and visitors on this site -- but I also have a chance to contribute a bit here and there, from time to time... It seems to me that Theresa2 really should be discussing pay out to heirs versus creditor claims with a reliable probate or estate attorney. The lawyer will know what the specific probate laws are in Theresa2's state... just to be sure all the i's are dotted and the t's crossed. That's why people have lawyers handle probate and trust inheritance matters. Also sounds to me like Therersa2 could use some extra cash coming in... Maybe I'm wrong, but that's the feeling I get. Theresa2 -- you know, you can always apply for a probate loan, inheritance advance, or inheritance loan -- from one of the better, more established and reliable inheritance advance boutique firms just searching for inheritance loans, or probate loans, or inheritance advances... maybe for fast estate loans, trust fund loans, probate advances... whatever, using that terminology -- you should come up with several reliable inheritance advance firms -- you'll see right away why people like inheritance loans... an inheritance advance is super fast and doesn't give you the 3rd degree or mental torture like most bank loans do.... These firms give out inheritance loans that are relatively easy and fast, and you can pay off the inheritance advance later on when probate closes. or when a trust reaches final distribution. None of that monthly payment nonsense, or compounding interest... So Theresa2 -- or any of you guys who might be in a similar position -- can put together a pile of really fast inheritance advance cash, and not have to deal with any of the usual personal loan institutional garbage! Kind of win-win, as I see it.
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LMR - you'll need to get your father to agree to change the beneficiary designation - to include above what is split - any expenses of the estate. Otherwise, if the insurance settlement or the bank account is POD then it's non-probatable asset. Which means it will be split and any expenses will not be paid.
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Are you saying the insurance policy need to be designated for burial insurance other than that some one can see that as their inheritances.I have a Legal zoom will and have designated each of the five an equal $ will that fly.I left brother and a sister in charge neither are married!
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Lmr - you should try to get dad to sign off on a promissory note or letter of agreement of some type that states the costs incurred for care (would be the hard costs not payment to you or hubs for caregiving) will be reinbusred to you either from his assets while alive or from his estate upon death.

GardenArtist - perhaps you could give your thoughts on this?
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need help. My brother and I are listed as equal beneficiaries for my father's estate. He is almost 94 and has lived with me and my husband for 8 years. (God bless my husband). My worthless brother who lives 2 hours away visits 1-2 times a year, doesn't help at all and doesn't share in any expenses not covered by my father Social Security. The only thing left in his estate is a small amount of life insurance with some cash value.(not much) My question is how can I get the $12,000 worth of expenses my father owes us before the insurance is split? By the way, my brother can do no wrong and after 8 years my father thinks my husband and I should do more. He thinks it is my obligation as the daughter. He will not sign over the cash value for the expenses. He has congestive heart failure and is about to die. What can I do? Thanks
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I have had a similar dilemma. My mother passed and left no arrangements for her cremation. She had a POD checking account and 3 beneficiaries designated (me and my two siblings). I paid for my mom's cremation and agreed with siblings that whatever is in the account would cover this expense and then if there's any shortfall we cover it - or if anything remaining, we split it. POD accounts are non-probate assets - so even though I filed and had successful petition of assignment of account assets less than $2000 it would have covered the funeral expenses reimbursement and given a small share to each heir. The bank refused the court mandate reassigning the designation of funds and each sibling gets 1/3 of the balance remaining. I am out of pocket cremation expenses, court fees minus my share of the assets. My siblings reneged on their agreement as they can't afford to not take the money and see my effort to provide this service for our mother as my responsibility solely as I had the means and wanted a dignified burial for her (both siblings were useless in helping to get our mother's affairs sorted after her passing). The emotional cost has been much greater than the money. I feel butt-hurt about it for sure - my good deed affords my siblings a small windfall and I'm left holding the bill. POD accounts are great if there's a provision set aside for the burial expenses above all beneficiaries - otherwise, someone will get burned.
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My aunt is the executor of the estate an hasn't filled probate or produced a copy of the will for public record but yet her whole house has been remodeled and is on the market. Most of her belongings were thrown away with only my aunts say.how can she so this? Is there anything I can do about that?
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Noreen - a lot of the "exactly" what needs to happen will depend on just how your state approaches probate & intestate deaths. Some states are more family flexible while other states are very codified in theirs. So for Crowe's state, his approach works, while for what you had to do to handle your DH estate it was different; plus your a pretty savvy surviving spouse & spouse asset transfer somewhat easier.

I've been executrix twice in TX for "aunts" (20+ years past); and in the interim lots & lots of changes especially in how the "Knowledge of distributees" is done & makes a big butt difference in what type of probate & the sequencing is done. For TX, it's 120 days with a formal TPC 294(d) form. The only latitude is just when you open probate and present letters to start the clock ticking on the 4 yrs allowed. No way I could now do some of the things I did for one of the estates as really now you have to have an attorney do things that I was able to get done in various county CH.

For those who's deceased actually died with funds & assets, you let your probate guy take the lead & hopefully they work with you to get things done so that you save some paralegal costs and do some things yourself. I did a lot of what a paralegal would do; if I'm remembering right, you were able to do that too N1.
If there were assets to begin with, the deceased probably met with an estate attorney years ago and the widow/widower has a will and game plan set up (or their kids or their estate attorney do if their surviving parent isn't able to). For those with $, the system is clearer. But I think for families who have their elder on Medicaid as the deceased was totally impoverished, dealing with after death issues (burial, probate, etc) is almost a crisis issue as family will need to front all costs & they probably don't have an extra 10-15K to start with. The deceased was insolvent, like Crowe mentioned. That coupled with the tendency for people to be cheap to begin with; plus family greed (as we read over & over on this site) & then those who just aren't comfortable in a CH & fear of probate, makes for a real mess to deal with. If you add MERP to all this, it has the potential for a real clusterF.

About 60-70% of NH residents are on Medicaid & impoverished, plus all of those who are elderly & get other Medicaid services (like PACE), so all of those are going to get a MERP letter as an attempt for recovery is required. Family may find that they have to spend $ & get legal involved even if their elders estate is insolvent or nonexistent. If the parent dies with a bit of funds, really you need every cent to pay for after death costs first & foremost.

But back to BRIAN - so just where is the $. Is is sitting in mom's bank account?
Do you have something in writing from her as to the disposition of mom's estate? Did she do a will and name someone as executor? Or is it that mom put $ away and told you to spend it on her burial? If there's a will and if you are named executor, then you determine how the $ is spent - the account can be frozen and once probate opened you place your costs to the court and will be reimbursed; if it all goes for burial, then that's just what happens; Executor & will trumps whatever Sissy wants.

Brian - BUT if it's just $ sitting there & no will, that is waaaaaay more problematic. If the bank account is POD to either you or Sissy, either of you can go and withdraw all the funds from the account once 1 of you have a death certificate. If either of you are a signature on the account, you can go and close it even before death or the death certificate is issued. Sadly often the child that took care of mom, finds out in a bank statement that all the $ has been taken by a sibling as they were a signature on the account! If Sissy is the "1 will reading from being able to afford a used car" type (this lil phrase nugget from an aunt I was executrix for), then this could shape up to be a royal PIA. You know your family best (& their spouses - which are often the source of post death conflicts). If mom is at death's door & Sissy is apt to take the $, then I would suggest that you call today to set up appointments as FH that also have burial (not all do both, but you want one that does as it's just way easier). You go to a couple of different FH and get an estimate on a preened done THIS WEEK. Then use mom's money to pay for whichever you choose. Pay for it by a cashier's check so that the funds are immediate for FH and $ removed from mom's bank account with a paper trail. F&B average about 10K too. What seems to happen based on posts on this site, is that 1 sibling takes on all the responsibility for their parent; the other siblings do nothing except to have their hand out; then when the assets are to be divided expect to get their full % and do. The courts will divide all equally if that is how the will is written. You have to be proactive in all this. Now you may want to pay for all and not need or expect any compensation from mom's estate; but don't expect Sissy or other family to compensate you for all you have done.

If mom has a home, I'd suggest the following as well:
- set aside $ for floral for the funeral. Usually not included in a pre-need.
- set aside $ to pay for initial probate costs($1,500 - 3K); if no will, you will have to do a lineal heirship and need legal to do this as well.
- funds for house costs (taxes, utilitites, yard work, etc) for 6 mos to a year. I'd prepay as much as possible now. Like 6 months of water bills. If house insurance can be paid forward, do that as well. Make sure taxes paid up.
- if you are not in town, I'd set up a property management agreement for 6 mos.
This can be with a Realtor group - they would be the ones to get the listing on selling the house. Some will reduce a bit on the final commission if you do this. Or with a totally trusted neighbor. If you're in town, keep a journal on all trips to the house and documentation on all receipts on the home as well.

Good luck with Sissy, Brian.
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The answer to this question is state specific. That is, the procedure and the laws differ depending upon which state you are in. In my state, Pennsylvania, the priority of payments is governed by Section 3392 of the probate code (Title 20). In my state creditors may file a claim in the probate court, or on the executor directly. You cannot tie up an estate until you are certain there are no Medicaid liens to be satisfied. The statute of limitations on claims usually runs one year from the date of publication. It can get complicated, and the executor is personally responsible from their own funds if there is an error, and so attorney fees and other expenses of administration are given first priority in payment. My state, Pennsylvania, is not a community property state and the laws in those states is probably different.
I am currently probating an estate for a family where the funeral expenses are being paid first, and the beneficiaries do not receive anything because there is not enough money available. The laws in your state may differ. Again, you want to be careful about the way you handle the estate because the executor / executrix may be personally liable from their own funds for any mistake. In my state attorneys are required by law to have malpractice insurance, so that insurance inures to the benefit of the executor who retained the attorney. However, in many cases the attorney has done it so many times before that no mistakes are made. The attorney fees are paid from the estate because the courts want the estate handled properly. When there is a mistake, there may be clouds on the title of real estate or later litigation, which nobody wants.
If you insist on doing it yourself, you should find somebody who has done it before in your state, and get advice from them.
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No so. Crow. We've talked about this before. Remember? The executor, and perhaps with his/her attorney trot on down to the courthouse. There before the eyes of the probate reps, they file a Notice To Debtors and Creditors. Each creditor has ninety days to "answer" the Notice with a final amount due. Some states allow 120 days. A stamped pre-addressed envelope is provided for the creditor to return. If no answer is received in "a timely manner", the debt incurred by the deceased is dismissed by the court. No need to feel guilty. The estate remains open until closed. Some estates become insolvent soon after the deceased person passes.
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From what I understand expenses and debts are paid off from the estate before anyone gets any money.
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Hi there....can anybody answer this...if my mother has saved money to pay for her own funeral expenses will that money be divided between my sister and myself...in other words would my sister be entitled to half of that money instead of it all going towards my mothers funeral...Brian.
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Chim - understand your whole point on probate as someone who has been executrix twice. That is a great approach if there is money.

But one thing that is a real issue for elders is that for those who are on Medicaid (and really so much on this forum is from those who have parents either on Medicaid or trying to get them on Medicaid) is that there is no real $. They may have a small checking account with less than 2K in it (as an Medicaid allowed asset) & from which their DPOA pays their monthly income to the NH their required by Medicaid co-pay, so there is just no real $ anymore. For just so many on NH Medicaid, they do not have any funds left, have spent-down everything and their monthly income (SS and any retirement) goes directly to the NH for their co-pay & personal needs allowance. They have to be at need for Medicaid which means impoverished… there is no $$ anymore.

If they are on Medicaid & don't have a prepaid funeral & burial, then family ends up paying and not getting reimbursed as there is no estate, no money. If they are on NH Medicaid and still have a home, then someone within the family has been paying on everything for the home for the period of time that the parent has been on Medicaid and they can have their own claim against the estate to recover those costs. But family have to just front all those costs from the time Medicaid starts till the house is sold and then deal with whatever claim or lien Medicaid's MERP may have on the property. For those whose parents or elder is receiving Medicaid, there are very limited options and the main one is that you just pay for everything
(from funeral to taxes on the house) and may or may not be reimbursed from the estate by the sale or transfer of the home through traditional probate, small estates affidavit or doing a muniment.It's just never simple.
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I think that at this point, you need to see a lawyer and ask them.
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Interesting....cmagnum, you honorably paid what was owed - for a moral person, it did not make any difference to getting honest debts paid. But the thing here is: if the POD beneficiaries grab the money and run, how would an honest executor get the genuine debts paid? From the executor's personal funds? Sounds like some people are just too happy with fraud - dump Grandma on the taxpayers and run with that inheritance. A skilled (but immoral) lawyer can help you do it. My grandma always said: "The horses laugh when they pull a lawyer's hearse."
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theresa are these accounts POD "payable upon death"? If so, then the money goes directly to the people listed as POD. Are these beneficiaries listed as POD on her accounts?

My mother made me joint owner with right of survivorship of all her personal accounts. Upon her death, the accounts became mine and I paid her final bills from those accounts. Thus, there was no need to set up an account called the estate of ____ from which the person's final bills are paid.
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I am concerned by looking through the above answers to your question that you are receiving "advice" from folks who are not associated with the legal system and are not clear on probate law. I am only a paralegal but have worked in probate for over 30 years. I don't know any attorney who would advise that all of our mother's funds be held in TOD or joint accounts. There needs to be an account from which her final expenses are paid. In addition, if she owns a home that will be put up for sale, there should be enough money available to continue to pay homeowner's insurance, utilities, and the mortgage payment until the home can be sold. A will governs both the distribution of real and personal property in accordance with your mother's wishes. It is true that a small estate (varies in value from state to state) can be handled without filing a formal probate, but there will still be expenses and your mother's assets still have to be distributed according to her Will, if she has one. I would suggest that you contact an attorney of your mother's choosing for advice. If your mother does not have the capacity to do so and you have a Power of Attorney, I would suggest that you set up an account to prepare for paying off expenses. A predisposed plan to have all funds in TOD and joint accounts to avoid paying expenses could present problems as a creditor is able to file a petition for probate or can file a claim in any probate you file. If intentional avoidance of paying the decedent's expenses is proven, the beneficiaries could potentially have liability for claims against the estate.
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HolyCow, thank you for taking the time to answer. Your answer demonstrates the difficulty of communicating across state lines.You see, probate laws are governed by the states rather than federal law, and each state has their own set of laws.
There are differences: For example in my state, Pennsylvania, you do not file a Notice to Debtors and Creditors and wait 120 days. Rather, you publish a notice in the local paper and the creditors must respond within one year (with some minor exceptions). In my state, Pennsylvania, there is an Inheritance Tax due on every estate, no matter what the value. As you point out in your answer, there is also a Federal Estate Tax for large estates over $5.M, but "Inheritance Taxes" are different from the Federal Estate Tax. Every state has their own law about Inheritance Taxes.
Many of us who practice Estate Planning and Elder Law know Ed S. (nice guy) and about trust to trust transfers of IRA accounts (which were used before Ed came along and marketed them). We frequently set up trusts for protection of beneficiaries to protect against Medicaid claims and more. However, the law directs that you do it at least five years in advance. If you do, it is perfectly legal.
If you have a state specific question about law, I suggest avvo.com where you will get a free answer from a local lawyer, about your state's laws. I think this forum is great for ideas for caregivers, but not the place to post legal questions, because there are 50 different sets of laws, and an answer may be incorrect and harm someone. I also answer questions on Avvo. I will continue to use this site for helpful information about caregiving, but it's not the place for legal questions if there is a much better alternative, more likely to provide the correct answer.
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HolyCow: All Trusts have some sort of beneficiary designation, even if it's a bank. Best way to avoid paying taxes on an IRA distribution or a distribution from a Trust, is to form a Trustee-to-Trustee transfer. I actually do not know how this is done. Must call Ed Shott for details. For the high rollers, lottery winners, etc. get the money out of your hands and into a Trust. No one can touch it then. You do not "own" it at that point.
As for the deceased's "bills", you file a Notice to Debtors and Creditors in your county. If no creditor answers within 90-120 days, then, do not, I repeat, do not pay the decedent's "bills". If a creditor answers with the final tally, then that bill must be paid by the Executor ( Personal Representative).
No one has to worry about the Inheritance Tax, " Death Tax" or Estate Tax right now as the amount retained by the estate must exceed $5,000,000. It changes every year.
Anyone know what the exemption will be in 2014?
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HolyCow, I assume that you are your mother's Durable POA. I would find out more details about the Trust to see if there is a beneficiary listed. Her money should be being used for her care which includes groceries and other bills plus a nursing home if and when needed. Medicaid would come into play at the point of a nursing home if she does not have any money left to pay for it. I find myself a bit confused when you say that the house is paid for in full, but then say that you pay her rent. Does that mean you are paying her rent because you are staying with her. You are taking care of her 24/7 and I don't see any reason why you would pay her rent for living in the same house with her. I think you need to protect your own money which you will need one day and go ahead and spend down her money on her care and keep good records when you do.
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Oh wow, reading all of this now has me frightened! My parents formed a Trust and my mothers accounts are in the name of the Trust but I don't think there is any Beneficiary listed as the Trust would inherit all the money, right? I have zero idea about what you are discussing, my first thought would have been that the creditors had to be paid first and any money left would then go to the Beneficiary, but after reading this, I see I am wrong.

Now my mother currently has no bills, house is paid in full, she has one credit card with about $100 owing on it. I am planning on pre paying her funeral expenses, her burial plot was purchased in the 1960's so that is paid for. The only thing I am concerned about is the future and the possible need for a nursing home down the road. At that point Medi Cal would most likely come into play. What bothers me is I am an upaid caregiver 24/7 and I pay her rent and buy groceries, so I keep increasing her wealth which will then have to be spent down. I am wondering if I should stop paying her, I have already paid her about $57,000, which just goes to pay all her bills while keeping her savings untouched.

Does anyone have any suggestions?
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I wanted to add some additional detail to my answer above:
1. If you do hold a valid power of attorney, and you transfer funds which will adversely affect others, you may want to consult with the beneficiaries under any will. They are the ones who have the right to complain about actions taken under the power of attorney. In my state, Pennsylvania, the beneficiaries can file a citation against the agent under a P.O.A. for an accounting. Also, we have a provision in our state laws, in 20 Pa. C.S.A. § 5601, which prohibits co-mingling of funds, so do not mix the principal's funds with yours even though it is a joint account.
However, the laws of your state may permit compensation to you for serving as agent under a Power of Attorney. My state, Pennsylvania, does provide that under section 5609 of our Code. Also, you may have the power, as agent, to prepay funeral expenses. I do not know what state you are in, and so I cannot tell you for certain.
2. The essence of my first message was that, if you step in to serve as an executor / executrix, then do the job right to avoid personal liability. In reality probably 95% of all work done by executors is done without a problem. However, when there is a problem, who do you think is called upon? A lawyer of course, and lawyers may have enough business on this topic to keep them busy for years.
3. You do not have to serve as executor if you do not wish to. So long as you bring the will to the appropriate authorities so that someone may be appointed, you can renounce your right to serve as executor. By way of illustration, I drafted a will years ago for a very fine individual who passed away recently. There were Medicaid liens that consumed the entire estate. The Dept. that collects those liens will allow the executor the higher of 6% of the estate (by virtue of Title 55, Section 258 of our Pennsylvania Code). The executor did not want to get involved, and filled out a renunciation and asked me to deliver that, plus the final will, to our local Register of Wills. I am doing so. A creditor (probably the Dept of Welfare) will then probate the estate to collect the money due them.
4. If there is not sufficient money to pay creditors, you, or the designated beneficiaries of the accounts, are not responsible for outstanding bills. There are some collection agencies who may try to collect from those who do not have a legal obligation to pay and there have been newspaper articles and court cases regarding those companies.
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If there is more than $75,000, then you will go through probate. Before her death, get an irrevocable trust drawn up stipulating debts are paid first before beneficiaries. There were five of us, and that is what my sister did.
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