Advice for settling an estate(or lack thereof)

OK, I'm aware of free legal advice on the internet - but here's the situation:

My sister-in-law passed away over the weekend. 38-yrs old, single/never-married, no kids. She lived in a house my FIL owns(in his name only), he just bought her a vehicle(in both their names), other than that the only property she actually owned was a dead '98 Neon(blown engine, wrecked on all-4 sides, trashed interior, etc.), clothes, a few pots/pans, nicknacks, and some DVDs. $2000 life insurance policy.

But she had at least $3600 in debt, and probably way more(still going through paperwork). She spent it all on genealogy websites & student loands.

So my question is this: Is there even an estate to settle?

As long as her name is on deeded/titled property, insurance policies or debt obligations, there is an estate, and thus paperwork to be taken care of. The good news is that unless there's some weird debt situation which you have yet to uncover, her consumer debts should be forgiven with her death. The executor of her estate (whoever goes to the courthouse first and registers, if she didn't declare one in a will) will need to send official copies of her death certificate to her creditors.

And this is why you need a will even if all is says is, "John Doe is executor of estate as they see fit upon death." And is signed dated and witnessed.

and to answer your question, there is an "estate". You listed property in her name, debts in her name, and probably there is other things in her name. Problem is now you are going to be stuck in probate with a judge deciding the final outcome.

Probate is NOT the end of the world. 99% of the time the entire residual estate gets granted to the next of kin, in this case probably your FIL.

My condolences, BTW.

There are apparently almost no cases where a person dies and there isn't something that can be called an "estate"....with the possible exception being a newborn.

My condolences as well.

I am currently a co executor of my father's estate so I have some experience with this.

First off: debts are NOT forgiven at death. Any creditors, either secured (mortgage, car loan) or unsecured (credit card or similar) have a legitimate claim against the assets of the estate. These are handled differently.

She does have an estate, it may have no assets to speak of and be in complete disarray but it's still an estate. The clock starts ticking for them at the time of death; they have one year to file a claim. At the end of that time if they have not filed a claim they are forever barred from doing so, even if it is a legitimate debt.

From what I am reading here, they can claim only against her ins policy and what little personal property she had. They cannot go after the next of kin for debts, with one exception: the car could be a problem, since your FIL co signed.

If there is a lien against the car the lienholder has first crack at the car and if the car is worth less than the loan amount the other creditors are screwed. It will probably wind up being reposessed by them unless your FIL wants to take on the whole loan himself. If it is repossessed, even though it was due to her dying yes it will affect his credit. That's why it's a good idea to be VERY careful what you co sign, and he really needs to consult a crook, er, attorney on that one.

As long as the house is in his name only, they have no claim against it, even if she was paying him rent and he can do as he pleases with it. If she had any ownership at all in the house, then that's a different story entirely. They can file liens against it, if he sells the house those liens would have to be satisfied before the deed can change hands.

Again from what I read, she died intestate; that means no will. That means once the estate is settled, if there's anything left it would go to the next of kin, if she was married that would be her spouse. If not, then it's the nearest blood relative, in this case her dad. If both parents are alive, it would go to both of them.

I think, if I were in his shoes, other than settling the car issue I'd just let the probate court have the whole thing and wash my hands of it. I seriously doubt he will see a dime.

I don't know the rules down there, but its actually quite clearly laid out here. Executor goes to lawyer, lawyer is allowed to charge a certain percentage of the estate's value, on a sliding scale. Debtors are paid from the estate, any remaining value goes first to spouse, then to children, then to parents, then to siblings...

Chances are the rules are pretty clear, you just need to find them on your states website..

Only problem is (from what I'm reading) is there isn't a will so there isn't an executor. That means someone will need to be appointed executor (should have made that clear earlier) or the probate court will handle the whole thing themselves. That's how SC law works, for instance my ex took on the role of executor of her father's estate even though he died intestate and the probate court had to okay it. He had a small estate (some savings, some stocks, a car and personal possessions but no house, etc) but no debts at all. Even though it was all very cut and dried, she still had to wait a year.

In this situation, I'd go with Plan B (let the probate court do the whole thing) and if a check surfaces at the end (not bloody likely) then that would be a somewhat good end to an otherwise sad situation.

Thank you for the kind wisher.

Yes, my wife was appointed by the family to be executor.

I do know that if there is a designated beneficiary on the life insurance(there is) that her creditors have no legal claim to it(though they will try regardless).

I called the county office & they said no probate is required if the estate is worth less than $50k.

Hi Petegossett,

I’m sorry for your loss.

Yahoo Finance published an article just yesterday indicating that debt collection agencies have become much more aggressive in going after the deceased.

False claims of obligation have been made by collectors so I suggest you get up to speed on the law and be ready for them.

Take care, Brett

My condolences and best wishes to your wife.

True, they can't go for the insurance policy but that won't stop them from trying and yes they will flat out lie to try to get their claim paid. Your wife will get collection calls, both my brother and I did and I bet at some point she will be told they are going to do something dastardly to her credit if she doesn't cough up. As long as she follows the established payment order she has nothing to fear, even if it turns out there is no money to pay them (very likely). The best advice our attorney gave us was to firmly tell whoever it was that they needed to file a claim IN WRITING against the estate with the probate court and wait a year like everyone else. Then hang up. Do not accept offers to settle early for a reduced amount!

Once the year is up, she can negotiate settlements (if there's anything to settle with). If there isn't, they are S.O.L. and no matter what they say, they cannot file a claim against your wife UNLESS! and this is very important! she breaks the established order of payment.

It goes like this: administrative costs come first. This includes funeral expenses, attorney fees (are you surprised?), probate court costs and the executor's fees. Yes, she can get paid for doing this but she needs to get the probate judge's approval before writing herself any checks. All these hold roughly equal weight.

Second is the creditors, and they have a pecking order. Taxes of any sort are first (are you surprised?), then the creditors. Secured creditors come right behind the tax man since they already 'own' an asset (that's where the car lien comes in). Then in last place is the unsecured creditors. By the end of the year, they will usually settle for a much lower percentage (again if there's anything to pay with).

Third is the beneficiaries (if any). They get the picked over bones.

If your wife pays anything out of order, she can be held personally liable! Believe me, she has to watch her P's and Q's on this.

As small as this estate is, I would recommend that instead of an attorney she consult directly with the probate court. Also, my advice again as a non-attorney: don't give ANYONE (including herself) a dime until she gets the go ahead from the probate court. Also, she needs to keep good records.

One other thought: unless the will provides specifically for it, an executor cannot sell estate assets without probate court approval. Anything of reasonable value (good jewelry, cars, large appliances etc) need to be inventoried. The probate court will probably give the go ahead to sell that type stuff (except the car with the lien) but I wouldn't do it before they say OK. That money will need to go into an escrow account where it will sit for a year until the creditor claims all come in. again, since this is such a small estate, probably what will happen is she will get a couple of nasty phone calls, maybe a letter or two, then at the end of the year there will be no creditor claims. The cost/benefit ratio for the court fees etc is not in their favor on such small numbers.

I think the answers are (in no certain order):
- At least a 3500 dually with a diesel
- Shotgun or assault rifle
- Johnny Walker Green
- NYC Asian Escorts > Ford Escorts
- Miata

That is all I got

Yes, yes....I like the sound of that!