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Author: devbost One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308881  
Subject: A nightmare of epic proportions Date: 10/12/2006 11:32 PM
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I haven't been a member of the Fool for more than five years now, but I'm back because I knew that the people here would more than likely be an excellent resource for the nightmare my family is facing.

My father died two weeks ago this Sunday. He had no life insurance, but he did have a pension income from working for a northern California sheriff's department for 18 years. He would have been 65 this past weekend; I believe he was about to begin drawing Social Security, but hadn't yet actually gotten the ball rolling on that.

Upon beginning to clean out my father's office of years of papers and clutter, she listened to the messages that had accrued for several months on the voice mail on my father's personal business phone line. To her surprise, several of the calls were from collection agencies asking him to contact them about credit card bills that had gone unpaid. From what my mother can tell, he had a Discover card and a Citibank card that he had run up total debts amounting to five figures on, without ever telling her, and which had apparently gone neglected over the past few months as he was too sick to leave his bed, much less worry about paying credit card bills.

She spoke to someone at the collection agency, and they have asked her to enter into a payment plan to settle these debts. Fortunately, although she verbally agreed over the phone to do so, I learned of this in time to inform her that she should sign absolutely nothing until we get some more information about what these credit cards were used for, when the accounts were opened, etc. She is going to contact the credit card companies and make inquiries about the accounts. We believe that he may have used them to pay medical bills that were accrued during his treatment, but we don't know for usre as yet. I'm personally not ruling out the possibility of identity theft, for no other real reason than that I can't fathom my father doing something like this.

Since this is in California, which is a community property state, I understand that my mother will most likely be on the hook for some or all of these debts, providing that they were in fact accrued by my father. What I'm looking for is some sage advice from the community on how to help my mother handle this. She's a complete wreck from losing my father, and as you can imagine, finding out that she may be responsible for a five-figure debt that she had no idea existed was a terrible shock to her.

Thanks in advance for any advice anyone is willing to give.
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Author: tmeri Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 238743 of 308881
Subject: Re: A nightmare of epic proportions Date: 10/12/2006 11:44 PM
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My father died two weeks ago this Sunday.

My condolences to you and your family.



Since this is in California, which is a community property state, I understand that my mother will most likely be on the hook for some or all of these debts, providing that they were in fact accrued by my father. What I'm looking for is some sage advice from the community on how to help my mother handle this. She's a complete wreck from losing my father, and as you can imagine, finding out that she may be responsible for a five-figure debt that she had no idea existed was a terrible shock to her.

I don't know the legal ins and outs, but your mother is trying to deal with this too quickly. My SWAG at it is that the creditors should be informed that they will need to make a claim against the estate. If a lawyer will be involved in settling the estate, you can ask him what will happen. I suspect some assets will be protected. Are you the executor for the estate? If so, don't pay anything until you are sure it is the right thing to do. If she is the executrix, give her the same advice.



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Author: devbost One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 238746 of 308881
Subject: Re: A nightmare of epic proportions Date: 10/12/2006 11:49 PM
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My condolences to you and your family.

Thank you.

If a lawyer will be involved in settling the estate, you can ask him what will happen. I suspect some assets will be protected. Are you the executor for the estate?

He didn't leave a will, so we're just sort of winging it as far as his "estate" is concerned. I have no idea who the executor would be in the event that no will exists. I assumed my mother would be the executrix.

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 238750 of 308881
Subject: Re: A nightmare of epic proportions Date: 10/13/2006 12:29 AM
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devbost,

You wrote, Since this is in California, which is a community property state, I understand that my mother will most likely be on the hook for some or all of these debts, providing that they were in fact accrued by my father. What I'm looking for is some sage advice from the community on how to help my mother handle this. She's a complete wreck from losing my father, and as you can imagine, finding out that she may be responsible for a five-figure debt that she had no idea existed was a terrible shock to her.

Condolences for your loss.

The good news is that your mother doesn't owe anything for your father's debts.

The bad news is that his estate may.

The questions here are: What assets were solely your father's? And has your mother (improperly) taken possession of any of those assets?

Jointly titled property generally reverts to the sole title-holder at the death of the other. Community property assets also revert to the surviving party; but the transfer of title to real property usually will not occur automatically. For that in some states a death certificate is all that's require. For the rest, an order from the Probate Court.

Then there's the problem of individual assets. In a community property state, any assets that were the sole property of a party of the marriage and not commingled, remains the sole property of that person. In other words, title of that property does not pass at death and requires the consent of the Probate Court. If your mother holds any such assets, they may be subject to seizure by the Probate Court, the Executor of your father's estate or by an appointed representative of either.

As a general rule, only individual assets can be used to satisfy the estate. This is true even if your father died with a Will - he cannot Will his Estate to pass property that would have already passed legal title at his death.

Given no Will, your father died Intestate. If that's the case, the court will use a State-mandated formula to divide up any individual assets that remain. The first people in line to receive funds from those assets are his creditors. Family members come later. (Creditors actually come before the instructions in the Will as well.) The court will have another State-mandated formula for the division between heirs, unless those heirs can jointly reach an agreement acceptable to the appointed Executor of the Estate.

Also, She is going to contact the credit card companies and make inquiries about the accounts. We believe that he may have used them to pay medical bills that were accrued during his treatment, but we don't know for usre as yet. I'm personally not ruling out the possibility of identity theft, for no other real reason than that I can't fathom my father doing something like this.

Your mother needs to pull a copy of her credit reports and find out what obligations are being reported as hers. Anything her husband took out in her name should be disputed. If he took out debts fraudulently in her name, she may need to file a police report against him. Don't be shy about this - he has nothing to loose by it now. Other identity theft should be treated just as aggressively. Once she's filed the police report, she needs to dispute these debts as fraudulent with the creditors.

Don't expect your father's creditor's to be forthcoming about any debts he may have incurred in his own name. They should talk with your mother about any accounts that are in her name; but anything solely in his name is probably off-limits - at least until she gets herself appointed as Executor of the Estate.

Finally, if there is a good deal of money involved - either on the asset or liability side, your mother may need to consult with a Probate Attorney. She needs to find out as much as she can and then present it to the attorney in her initial consultation. She may or may not need to hire an attorney for Probate Court; but she definitely needs to talk to someone about her own liability here.

Oh. One last thing. If she gets appointed Executor, her reasonable expenses - such as attorney's fees - can be deducted from the Estate's assets. Those fees actually come ahead of any creditor's obligations...

- Joel

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Author: tmeri Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 238751 of 308881
Subject: Re: A nightmare of epic proportions Date: 10/13/2006 12:34 AM
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He didn't leave a will, so we're just sort of winging it as far as his "estate" is concerned. I have no idea who the executor would be in the event that no will exists. I assumed my mother would be the executrix.

I'm on very shakey ground here; it is to be hoped that someone who has been through this in California or someone with a better understanding of estates will be along later to help you. In my state the probate court would appoint an executor in such cases. It might be wise for you to spend an hour's worth of lawyer's cost to get some legal advice.

This link may help in the meantime. Page down to the "married person" part:

http://www.mbscott.com/intestat.htm

All community property and quasi-community property passes entirely to the surviving spouse.

Possibly, unsecured debt incurred by your father without your mother's name on the debt is not payable out of your father's estate. But check with a lawyer. I am not a lawyer, in case that wasn't obvious.


I did a google search on "intestate california" to find that link. You may want to google similar terms.




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Author: tmeri Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 238752 of 308881
Subject: Re: A nightmare of epic proportions Date: 10/13/2006 12:46 AM
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Anything her husband took out in her name should be disputed. If he took out debts fraudulently in her name, she may need to file a police report against him.

Any debt appearing in her name that she doesn't think she agreed to should be disputed. It may not be that her husband has done this. Companies who extend credit are just sleazy enough to put her on even if she was never involved, especially now that they've been notified that he has died.

She would probably be wise to call TOMORROW and put a freeze on all credit. That may help to keep them from doing this, though they probably have loopholes. Almost all credit laws benefit creditors, not debtors.





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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 238753 of 308881
Subject: Re: A nightmare of epic proportions Date: 10/13/2006 12:49 AM
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tmeri,

You wrote, Possibly, unsecured debt incurred by your father without your mother's name on the debt is not payable out of your father's estate. But check with a lawyer. I am not a lawyer, in case that wasn't obvious.

I'm not a lawyer either; but I've had some indirect experience with probate law. From what I know, everything you said and everything your link says is accurate. Of course I've never lived in California, so I don't have any idea about the specifics of Probate Law there; but this website speaks in a lot of generalities that apply wherever you go in the USA.

So yes, the individual debts of the Deceased are a problem for the Probate Court and the Estate's Executor - not the Decease's spouse. At least they're not assuming she didn't take possession of individual property of the Deceased. Even then, it would be up to the Executor to discover that and recover the assets from the spouse - the creditor has no legal leverage (or standing) to seize assets in her possession or sue her for liability of those debts.

- Joel

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Author: BklynBorn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 238758 of 308881
Subject: Re: A nightmare of epic proportions Date: 10/13/2006 2:54 AM
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Consult with a lawyer. Not for 30 hours at $250 / hour, but a local solo for a flat $150 or so. I suspect you'll go on to hire someone, but start with a consult. Your local (county) bar association probably has a referral service that screens the attorneys it recommends.

It's especially important because there's no will. You didn't know about the debt - maybe there are also assets you don't know about.

I am sorry for your loss. I remember when my dad died. He *did* have a will, but we were still overwhelmed when we looked at it, so we hired a local "pop and daughter" firm. They did a good job, mostly remained invisible, worth every penny.

BklynBorn (Esq.)

P.S. Let's all indulge in a moment of thought: where are our wills? Are they current? .....................Time's up. Thank you.

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Author: devbost One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 238768 of 308881
Subject: Re: A nightmare of epic proportions Date: 10/13/2006 8:30 AM
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Thanks to everyone for the input, especially to Joel for showing me a lot of the questions I should be asking that I wouldn't have otherwise thought to ask.

P.S. Let's all indulge in a moment of thought: where are our wills? Are they current? .....................Time's up. Thank you.

Not just that, but this whole experience has prompted my wife and I to get our rears in gear on buying life insurance. Our first baby was born a week to the day before my dad died (I now intimately know what the term "emotional roller coaster" means), and I'd hate to see them go through what my mom is going through. Even if we get her totally off the hook for the CC debts, she's still looking at a $17000 bill for the funeral and all the associated costs.

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 238769 of 308881
Subject: Re: A nightmare of epic proportions Date: 10/13/2006 8:38 AM
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Congrats on the new arrival and sorry for your loss. What time you have had!

Even if we get her totally off the hook for the CC debts, she's still looking at a $17000 bill for the funeral and all the associated costs.

Arghh...It's too late to help your Mom save any money on this, but don't buy the casket at the funeral home. Costco sells caskets...really. And they are just as nice, and a lot cheaper. They guarantee to get them to the funeral home, usually in a day or two, depending on weekends, etc. And most, if not all, states have passed laws that require funeral homes to use these caskets rather than ones they sell.

Or if you're going to cremate the body, the funeral home will usually let you use a casket and just have you pay a 're-lining' fee. Lots cheaper, too.

AJ

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Author: Diablo2Queen Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 238771 of 308881
Subject: Re: A nightmare of epic proportions Date: 10/13/2006 9:07 AM
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Not just that, but this whole experience has prompted my wife and I to get our rears in gear on buying life insurance. Our first baby was born a week to the day before my dad died (I now intimately know what the term "emotional roller coaster" means), and I'd hate to see them go through what my mom is going through. Even if we get her totally off the hook for the CC debts, she's still looking at a $17000 bill for the funeral and all the associated costs.

I'm sorry about the loss of your father.

In addition to life insurance, make sure you and your DW (if she works outside the home) are covered by disability insurance, too.



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Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 238806 of 308881
Subject: Re: A nightmare of epic proportions Date: 10/13/2006 3:02 PM
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You need to contact a lawyer, ASAP. Inheritence and estate are quite complex and depend a lot on local law.

Your mother doesn't personally owe a dime on debts she had nothing to do with... probably. Although promising it may now mean she does. And any assets your father had definitely need to go to pay off the debt.

Anyway, no one on here can get you through all the ins and outs and you need the assistance of a professional familar with your local law.

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