None of us like to think about our own or our loved ones’ mortality, but ignoring that eventuality will not make a stressful situation any easier. When a family member dies, it’s important for you to know what responsibilities you might be facing.
Here’s a breakdown of what you can expect if a family member dies and leaves debts behind:
Paying From the Estate
After a death, the executor of the deceased’s will is responsible for notifying creditors of the death. At that point, the creditors submit proof of the debts, and ask for repayment from the estate. The executor will then pay off the debts, first by using whatever cash the deceased left, and then by liquidating whatever assets are left.
If there is still not enough to pay off the debts, then the estate is declared insolvent. The creditors cannot then go after the heirs — unless they were cosigners on any of the debts.
When the estate pays the creditors, secured debts (meaning debts with an asset attached, like a home or a car) are paid first, while unsecured debts (generally, credit cards) are paid afterwards. This means that the unsecured debts might not receive a payment in the case of an insolvent estate.
Credit Card Debt
Creditors will do what they can to see that a debt is paid. In most cases, that simply means that debts must be paid off before any assets can be passed on to the beneficiaries of a will. When there is no money in the estate to pay off a credit card debt, creditors will generally close the account and forgive the debt. However, as we all know, creditors can be quite tenacious.
Often, creditors will attempt to collect payment from the heirs, even though there is usually no personal liability if the estate is insolvent. If you are hounded by a creditor for a deceased family member’s account, discuss the situation with a lawyer before you make any payments.
The one caveat about personal liability has to do with community property states. In those states, any account opened by one spouse could automatically be considered a joint account, in which case the surviving spouse could be considered liable for the debt. Again, an estate lawyer can help a spouse in that case to determine the best course of action.
It’s important to note that the 2009 Credit Card Act has now made it illegal for credit card companies to add additional fees or penalties to an account while the estate is being probated.
Dealing with the IRS
If a spouse passes away while still owing back taxes, the surviving spouse must pay the IRS both those back taxes and any current taxes owed. In the year of the death, the spouse must file taxes for the deceased’s final year of income, and s/he may file a final joint income tax return, although there must be a note of the death when filing.
The IRS will hold spouses liable for tax debt, but it will not hold any other family members responsible. However, as with any other debt, the estate must pay any taxes owed before heirs can claim their inheritance.
Life Insurance
In general, life insurance will not be considered part of the estate, and is safe from creditors. Since the insurance company pays the benefits directly to the survivor, the money is never placed in the deceased’s name, and is therefore not in the estate. There are a couple of exceptions to this, however. First, if the deceased names the estate as the beneficiary, rather than an individual, then that money is fair game for creditors trying to collect from the estate. In general, it’s a good idea to name a specific beneficiary for this reason.
A second way that a life insurance payout might be taken by creditors is if the beneficiary is a cosigner on any of the debts. In that case, the creditor has the right to sue the surviving cosigner for the balance if s/he does not continue making payments on the debt.
It is important to note that there is a difference between being a cosigner and an authorized user on a credit card. An authorized user did not sign the application and is simply allowed by the signer to use the card, which means s/he is not liable for the debt incurred.
The Bottom Line
Know your rights and responsibilities before you have to deal with the fallout of a death in the family. Familiarizing yourself with what you might have to deal with will make a stressful and sad time easier to manage.
{ read the comments below or add one }
My father passed away 2/14/23. All he left was 25,00.00 that was refunded back to him for a real-estate closing that did not happen due to his death.
I paid for his funeral, thefore I will take 5100.00 from that then it will leave 19,000.00. I have 4 sibling 2 of them my father would want me to help the other 2 my father never talked to them, and one often did drugs with him. I have no intentions of giving them a dime (can I do this). What can I do so I do not have to give them 2 anything? Any advice would be helpful.
My mother passed away this past January. The only thing to her name was her house. It sits on a 1/2 acre in the city. Nothing is owed on her house other than back taxes (approximately 4000.00) . I know first and foremost we are going to have to catch up on the taxes. We have made payment arrangements to do so. There wasn’t a will, no planning what so ever. I am the oldest of 2. So automatically the house went to myself and my sister. We have completed an “Affidavit of heirship”. I was just about to sell the estate until I got a letter in the mail saying she owes approximately $92,000 to Medicaid. I terminated the contract, because why sell it if Medicaid is gonna take all the money from the sale. There is no spouse to speak of, however there is a man my mom was with for about 25 years. They just never “officially” got married. I have been told by a family friend that if we wait for 4 years the state will not be able to recoup any of the 92,000.00 owed to Medicaid by my deceased mom. Is it possible that this is true? She did live with my sister for about 3 yrs before she passed away. Does this help in any way? I’m in Texas by the way.
My friend is the beneficiary for a gentleman that she knew from her old waitressing job, however, she hadn’t talked to him since 2008. One day she ran across the paperwork that he had given her and she checked on it and found out that he had passed a year and a half before finding the papers and sure enough she was the owner of his house, she went and took care of the back taxes and did the name change but now the HOA is trying to take possession of the house… what are her rights?
Hello,
My mother passed away in 2005. She was in a nursing home for 3 years prior to her death. My sister lived in her home for over 25 years, and continued to live there after her death. My sister paid the real estate taxes while after my mother’s death. My mother was the owner of the house.
My sister abandoned the house 2 years ago and stopped paying the taxes. My mother had no will or executor. My sister did not notify the city that my mother died and she didn’t notify the city that she was leaving the house. Now my brother is getting the bill for back property taxes and the demolition of the house. He and I haven’t lived in the house since we were minors. Who is responsible for this bill? Thank you.
My question is my buddy’s mom died from cancer 2018. She owed Medicaid 40 grand. His mom owned a duplex. Him n his brother live on each side and have for years b4 her death. Estate recovery sent letter to him. He told them about both on disability. Recovery said ok but no lien on house he has the deed. Why can he go put house in his nephews name then recovery has nothing to come and take when he dies. Can he do that. The letter said when he dies then the state would want house sold. Put in his nephews name now and recovery can’t collect squat. He can do that can’t he. He has the deed. He said no more letters said anything about a lien on house? How could you find out ? House paid off. Him n his brother have deed. Can someone answer from experience?
My husbands mother passed away in August. His sister is now claiming that because his mom co-signed he and another sister are 1/3 owners of her truck and responsible for it. Unless he signs a waiver. He never agreed to any of this and does not want anything to do with said sister. Is he responsible?
I’m not a legal expert so you should talk to a lawyer to confirm, but it is my understanding that the truck or any loan that the mom signed is part of her estate and must be paid for through the assets that the deceased still owns. If it’s a co-signed loan and under a 50/50 arrangement, then it’s reasonable to assume that the mom is responsible for 50% of the payments and thus her estate is responsible for that payment as well. On the flip side, the estate also owns the equity that’s been paid into the truck in most normal loan arrangements, so the heirs of the estates also own part of the truck.
Of course, specific languages in the loan documentation could indicate that any co-signers assume full responsibility for the loan in case any borrower on the loan dies. In this case, it could mean that your mom’s estate isn’t responsible for the debt anymore but the loan documentation would dictate that. That’s why it’s best to ask for legal expertise.
Finally, as an heir to an estate, it’s my understanding that your husband can refuse to receive the entire estate if, say, the estate actually has more liability than assets.
Inheritance is always tricky. Find legal help but remember that family is more important than money. Good luck!
My mother passed in March of 2019,are my brother’s and I responsible for her taxes?
I’m not an estate attorney so take this with a grain of salt, but in general, relatives aren’t responsible to pay for their parent’s taxes. The exception is if you or your brother is the estate’s executor and you distribute your mom’s assets to heirs, pay off other debts of the estate, or otherwise spend the assets in the estate before you pay the taxes owed, then the executor will be responsible for the taxes your mom owed.
I bought a house on land contract my mother co-sign. For a while I had to go away and the guy I bought it from erroneously deeded it to my mother and father I still have the original contract both my parents are passed in their estate owes some money to the IRS but since the house should have been deeded to me what do I have to do to get it
Just a question for my family. If an adult child was living with elderly Dad and she coherses him to withdraw 200000 out of his bank account and shes on medicaid then he dies. If someone reports that to medicaid will she have to account for it if there has been alot of money spent by her and she doesnt work? The rest of his estate is in a trust but the 200000 was never reported to the lawyer
I’m not an estate lawyer or a tax accountant so take this as an opinion more than legal advice. I believe that $200,000 counts as a gift and since it’s not income, then it would not count towards medicaid qualification.
In theory, that $200,000 will also need to be reported to the IRS on a gift tax return for your dad but the trustee can handle that.
my uncle was very sick and bed ridden . my family wanted to put him in a home but i forbid it and took 24 hour care of him free of charge. until he died 7 months later. i also threw out these three guys that were committing elder abuse to him when he was alive . nobody could do for him not only did i do that but any rats that were living in the large home i killed also. i made sure his meds were given properly to him because my other uncle wasnt doing that properly either. i was very close to my uncle and he was very happy and he said he wouldn’t of made it so long without me. i was grateful for the time i was able to spend with him until he died in his sleep. but his body gave out even tho he was getting better. i believe im in tilted to some inheritance . the day he died my other uncle locked me out of my other uncles house leaving all my things inside and changed the locks. he also took things out of the house like the expensive car
i am trying to find out about reserve mort ages, as my mother die on 10-01-2017, now a sister is having my brother kick out in the cold, it has not even been serviced any papers or any authorizes, please help
My dad has 60 acres of land that he divided up between the 3 of us in hhis will if there are taxes to pay how can I keep my portion
My husband died in 2013 from bladder cancer due to a bad drug and misdiagnosis of tumors in his ureter . When he went to the hospital with pneumonia , the doctor tried to say it was heart failure instead and put him on mega doses of statins that his cardiologist had taken him off of 5 months before because he no longer needed them due to lifestyle changes . The brilliant doctor that insisted that it wasn’t pneumonia , decided to do a urinary catheter that broke through a tumor causing a hemorrhage …they sent him home in Hospice Care saying he had heart failure . He bled to death at the house and I took care of him even when he was in a coma . I had an autopsy done …his lungs were boggy with pneumonia , he had bladder , urethra , and liver cancer that was un-diagnosed by the doctors and caused urine to back up into his kidney’s and severe fluid around his heart . The death certificate said : heart failure , renal failure and nothing else . I did a law suit against the pharmaceutical company . I just received a check for $236,000 made out to my husbands estate . The bank won’t cash it , I already went through probate and was the heir of all of our property ….now the bank is telling me I have to open an ” Estate Account ” and notify all of his children and do an IRS and State Tax and all of this hell after everything I went through ? Should I just tear up the check and forget the trauma ?? I am 70 and I was the executor of the will and had an attorney and went to court 4 years ago and was awarded everything …why do I have to go through all of this again ?? Is there a way around it , and why can’t the bank just take the check into my account without all of this drama ?? Also the court didn’t give his children one dime because they came out to California for two weeks and were only 14 miles away on a visit from Texas and never called us or bothered to come by and so my husband wrote them out of the will after one of their friends blurted it out in the store that they had just left to go back to Texas .
Hello,
And I am sorry for your loss. Let’s start bottom up.
If the kids are out of the will and the court agreed. That is that. I leave it to you after you have time to settle down, perhaps write them a letter, but don’t write something you will regret, and leave it at that. Give them somethings they might appreciate. DO NOT Tear up the check! IF you were awarded the inheritance and had an attorney deem you the heir. First of all your attorney should have told you to get an EIN (tax ID)IRS number. Yes you may owe taxes, but losing 236,000.? I am in a living nightmare for much less. If you have my email, and live close by, I will go into the bank with you because someone is not explaining something to you, it may be the tax ID and the court papers showing you were awarded the money. I want NOTHING from you. Except for my kids to be nicer to me through this but that’s not going to happen. TAKE THE MONEY. Get a small place with little up keep. Go on a cruise. Life is short. Eat desert first! Amy (Sunnyskies)
My mother passed away and I had to get her estate probated,so I hired an attorney. The legal fees as well as the bills for utilites were paid when the house was sold at a loss,how can I cliam this as a tax deduction?
My husband passed away 7 years ago but he did not have a will. He has two sons that never spoke to him, I wanted to sell my home and property, but fear of them getting the money. I was told that after the 7 year mark , that if they did not help pay bills or property taxes that their share became null- in – void, would you know if this is true.
my wife’s mother past away a number of years ago. Her sister was the executer of the will. Baltimore city md is trying to make my wife fix up her mothers house. My wife’s name is not on the deed to the house. Is she responsible for the house. The sister closed the estate and the house went into for closer.
Hello…
I have lived in my parents home for almost 4 years this December 1, as of 2012. I have been told that the hear said property was left too myself. I have been paying the Utilities & Real State Taxes ever since, with No Help from my 3 brothers. I am on a tight budget & I live on SSID. How can I transfer the said residence into my name?
Depending what state you live in. You cannot just transfer the house into your name. Paying the taxes is technically your responsibility as an heir. This does not mean you own the home.
You have to buy the house from the Estate. Unless your brother agree to transfer the home into your name . Good luck
She will live in house as she has all ways lived with me
IRS has lien on house made payment arrangment my daughter live with me I want her and my son to have house if I die how do i go about that since there is a lien for next ten years do I deed or beneficiary or transfer or will house to them please help
My Mother passed 3 months ago. Prior to her passing she was working with a lawyer to get her on Medicaid. That was completed successfully. She did not pay the lawyer prior to passing. She also had 1400. due to the nursing home the month she passed (that was her part of the nursing home bill). We had to borrow for the funeral. There is no money available. Am I responsible for these bills? The lawyer has now put the acct into my name and are sending me letters saying MY account is overdue.
I have a question for any atterney out there. My mother just passed in December 2015, she was the beneficiary of my father’s estates. There’s 12 syblins surviving, my question is. My mother did have a will, and in the will she names all of us her 12 servicing children from oldest to youngest. My oldest sister was the legal responsible child in taking mother to doctor appointment and also to manage her finances. The house mother lived in was paid for, and the 100% was left to mother after Dad passed in 2005, who is responsible for paying the property taxes until the property sells? My understanding is that all 12 servicing children inherit mother’s Estates, but I just wanted to find out who’s responsibility is it to pay for the property taxes? In advance I thank you for any information provided to me.
My father was in a retirement home, while he was in there he sold his house. He was still alive when he sold his house Nov 29 2015. He passed away Jan 6 2016. I will be making out his income tax for 2015. He had no debts or unpaid bills on the house everything was all paid up.
The money he received for the house is in his bank acct. Do I have to claim the money he received for the sale of the house on his 2015 in come tax. If the answer is Yes I want to know why I have to claim it.
My aunt died 07/ 2015
In 2013 my aunt added me as an authorized user on her cap one acct she stop paying and it went into collection thats all I know. This year I got a letter from the irs saying I owe 2100 …can they do this.
I would like to ask you this Question.my father died 32 years ago left his younget daughter stocks,bonds to be given to me when my mother dies 2015?,father died 1984, when do I receive them,and my brother was executor for both.thank you if you can help,
There are 3 phase questions. Better if you consult with an experienced attorney.
My brother is executor of my mother’s estate. He says he had to pay $49,000 in taxes. What amount of money would require having to pay the IRS that amount? Please advise I’m at a loss thanks
Sally,
The answer really depends on the tax rate. Let’s say it is 15% Take 49090/.15 for the original amount. But the tax rate may be as high as 50% or as low as 5%. That leaves a range of $98,000 to 980,000!
How to reduce stares taxes paid by a Deceased person prior to his assets going to the heirs.
We are Saudi Citizen. We have an account with Fidelity Investments with a balance of more than $100,000. We have 5 kids in school.
Thanks.
Can someone please help me. My dad passed away last week. He had no will, no assets. He had nobody assigned to do anything when he passed. I was his POA, but found out it does no good after their death. I was able to pay all his bills and close them. My question is what happens if nobody files taxes for him. He was in ICU for 10 days before his death and did not have insurance. What will happen to the medical bills. He had no life insurance, stocks, bonds. He had nothing. All he had is $3000 in a checking account. Any help would be appreciated.
My sisters and brother and I have been named as beneficiaries on my mother’s energy rights. Although my parents were divorced and are both deceased, my father owed unemployment insurance to the state of Texas. We have been notified that the transfer is being held until there is a release from the state of Texas. What can we do.
Question about an estate if you are on a joint checking acct and the person who u do not live with dies and did a reverse mortgage do I have to pay that or the person who the estate was left too? Also are u responsible for the rest of the bills? The person who died only actually put into the acct?
I have a question about life insurance, my brother recently passed away, and I was responsible for the funeral. I paid some of it but not all of it. He has an ex wife and a daughter that never spoke to him. I do not have a lot of money, my brother had life insurance without a beneficiary and I have all the paperwork for it, can I bring this to the funeral home so they can get paid? My niece feels that all the money should go to her when she found about the life insurance and I think she may fight for it. My question is can I go straight to the funeral home with these papers and can they get paid the rest that is due them? And the rest of course would go to my niece.
Thank you so much!
I am in a bad spot. My foster mother died early this morning and left a $60.000 life insurance policy to be divided between us 3 girls. Her biological daughter is the executor. She went down to the funeral home after Mom arrived to “make arrangements” and they said that she told them apply for her to get 100% of the life insurance policy. They said they will pay for the funeral and then give her the rest of the money. She told them she was the ONLY beneficiary. They seemed shocked wen my sister said no and we have copies of the paperwork.
How can she do this when we both have copies of the life insurance policy that says that we get a 1/3 each? I got the Land Rover and my sister got 2 motorcycles. Executor Sis gets the money in the bank account, some cds, and all his personal belongings and the rest of the estate per the copy of the will. She used this wording, without a copy of the policy, and got the funeral home to apply for her.
We just found out about this when we called about the burial and they slipped that she filed for all the insurance. The insurance company is closed until Monday. We had all agreed to wait the weekend and tackle this Monday after the funeral Sunday. I have heard stories but never thought I would be one of them. Can anyone help? He isn’t buried yet, I am still crying, and she is jumping on a payday.
Our roommate, in California, died, leaving me Trustee and sole Beneficiary of his estate, in a trust,that was drawn up a couple of weeks prior to his death. Now his out of state sister is trying to claim all the furniture and she intercepted an attorney, that he gave a deposit to file bankruptcy, that was never filed and got the deposit. There is no money to hire an attorney. Just a house with 2 liens and a mortgage owed and all the furnishings. I’ve been paying the mortgage and utilities. She is threatening probate. What are my options?
My brother expired at Baltimore city of U.S.A. But he is a Indian citizen and has left all bank balance as POD in the name of my sister in india. But by brother is single, without children. Our parents are already expired when we are young. Now myself and my sister are only the legal hierer . But there is no valid will by my deceased Brother. But we both are Indians. Money as per POD, is transferred to my sister’s name after the death of my brother. But sister is not giving any share of money to me by saying that she is the owner of the bank balance. can I get the bank balance according to Indian law?
please reply
My brother expired at Baltimore city of U.S.A. But he is a Indian citizen and has left all bank balance as POD in the name of my sister in india. But by brother is single, without children. Our parents are already expired when we are young. Now myself and my sister are only the legal hierer . But there is no valid will by my deceased Brother. But we both are Indians. Money as per POD, is transferred to my sister’s name after the death of my brother. But sister is not giving any share of money to me by saying that she is the owner of the bank balance. can I get the bank balance according to Indian law?
please reply
My brother expired at Baltimore city of U.S.A. But he is a Indian citizen and has left all bank balance as POD in the name of my sister in india. But by brother is single, without children. Our parents are already expired when we are young. Now myself and my sister are only the legal hierer . But there is no valid will by my deceased Brother. But we both are Indians. Money as per POD, is transferred to my sister’s name after the death of my brother. But sister is not giving any share of money to me by saying that she is the owner of the bank balance. can I get the bank balance according to Indian law?
please reply
The checks are coming to me, but I can’t cash them because they are made out to deceased’s estate. What to do with them?
What to do with incoming checks to the estate? Can they be put in deceased checking account, even though it was closed at death. No executor, no estate.
If a person died in Kansas and I live in Texas and I’m in the will how long will it be before we r notified?
My sister died 4/2014. I am her only heir. She left no will but had no assets at all, living on disability while she died of cancer. I received her 401K and life insurance. She left about 15K in credit card debt. Only one creditors filed a “statement of claim” for about $2K. A week after she died her tax refund checks were sent to her. $550 from the Feds and $250 from State of Cal. I have done nothing with these checks, I have them sitting in an envelope. If I make claim for her tax refunds will I be bound to pay her debtor (who made the “statement of claim”) with the tax refund money or is it legally mine, as her only heir. If I did make a claim for the money how will the credit card company know ? And will they come after me to pay it back to them ? If that is the case I do not want to involve myself and I will just tear up the tax refund checks as I do not want the liability and the hassle is not worth the money.
My moms husband died 2 months ago. Back in late 2913 he bought a 2014 Chevy Truck. When he died he owe close to 55000. My mom’s name is not on the truck at all. Can the estate sell the truck for let’s say 5000.00.
on the way from being evicted not addicted
another question if I destroy my will will that be enough to protect my daughter from the IRS if I owe them as well? My health is deteriorating and very concerned in case I were to pass. is destroying the will good enough or is it recorded in the court?. I’m about to lose everything as well and close to become homeless that is also the main thing that really scares me.I am within a month of becoming addicted I have no way of even moving my furniture or the funds to have somebody do so or anywhere to go I am also disabled. And on disability which there’s no way I can make ends meet at this point. I’ll be forced to take my daughter to her mother’s house where there is limited income as well. My daughter also has no means of transportation or a job
Tom,
So sorry you are doing well. Unless your signed something saying she was responsible, the Estate not the heirs owe the debt.
my daughter is the executor and is incompetent as far as I’m concerned unfortunately. She is my executor in my will and wondering if she would be responsible for back taxes or bills if I were to pass away. Will they harass her will they force her to pay as
Tom,
Your executor doesn’t have to be anyone connected with the inheritance nor even be family. Is there a friend or lawyer that can handle it instead?
From what I understand, the Estate owes the taxes, not the heirs.
Good luck with this very important task. -AJ
Thank you very much AJ. I appreciate the advice.
My brother passed away and i was beneficiary of his savings acct. (POD)and cds. Going through his papers he owes back taxes. The estate is not being opened as the executor, his friend, said there is no money to do it (lawyers advice who did the will)…property was left to co-owners. There was no spouse, he was not married. He had three old basically worthless vehicles.
Will i have to pay his back taxes with the money from what i got from his accounts?
In that case, the creditor has the right to sue the surviving cosigner for the balance if s/he does not continue making payments on the debt.
My question is a unique one I would supose. My friends mother passed away in 04. Her mother for 15 yrs had suffered with alziemers. Her mother was benificiary of her sister insurance policy. The sister past away first and my friends mother never cash in the policy . My friend found the policy ànd is her only çhild . My question is she entitle to the claim ?
I’m trying to figure out utilities in all this. My mom died, and she owed money to the municipal authority for sewage. I lived with her along with my brother and as soon as she died we looked for a found a place and moved out of her house. We were there for about three months after her death. Can they hold us responsible for her bill? I had wanted to try to pay it but couldn’t afford to but they’ve now put my name on the bill.
I have a question for an attorney out there. My close friend of mine is owed a lot of money from someone who took anger management classes from her for many years, and did not pay a great portion of her fee. He agreed to sign a notarized document staying he would pay her back with up to 75% of his mother’s estate upon the event of his mother’s death (the parents had only one child) for all services owed.
He also said he would continue making monthly payments to my friend to pay his past debt even if he left the area, which he now has (he ran out on her and her husband – they have a disabled child who has extensive medical bills). He has not paid my friend a dime. Upon the event of the mother’s death, can my friend go after this guy for what is owed her? (She has the original signed, notarized document, witnessed by two people. Thanks in advance for your response.
Gary C.
My mom just passed on the 5th.. She spent the last 6 weeks of her life in a nursing home. Her insurance denied payment to them. $8000 bill is owed. There is no money. She owned her home, and had a legal TOD done for it to transfer to my sister. Can the nursing home try to or force my sister to sell to pay that debt? Since technicaly the home is now owned by my sister.
My husband passed away and left me with huge credit card debts and no money. There is a will but we own nothing but our unpaid for home. Can the creditors take my bank accounts money( small amount) or attach my mothers account with my name on it? I live in Washington State
Craig,
My sincerest condolences on your pending loss.
As far as your mother’s financial rssponsibilities, it depends. Here’s some free advice but keep in mind you get what you pay for.
http://www.ehow.com/info_7952992_one-responsible-spouses-medical-bills.html#page=0
My stepdad is bed-ridden with cancer. He will be passing in the days coming. My mom and him have no joint accounts. He has a living trust in place that names his daughters and brother as beneficiaries to his property(home, truck, boat, motorcycle and cash.) He does not have medical insurance and the bills are beginning to pile up. Will she be responsible to pay that debt?! She isn’t getting anything, nor does she want anything, as far as financial gain goes, but she is very worried that she will be stuck with his medical bills because they are married. Can anyone give me some guidance?
My mom was assigned as executrix for my brother’s estate when he died. Fortunately, the legal services were covered by Lowe’s. You should check to see if yours is covered by your employer. Professional legal advice was critical to her properly administering the estate. BTW, his 18 year old son received one-fourth of his insurance and 401(k) accounts and promptly bought 2 cars…not to be outdone, his 21 year old daughter bought herself 2 new cars. The other half of his estate is waiting for 2 children to turn 18. Please, please talk to a lawyer about a trust if your beneficiaries are less than frugal with ‘found money.’
Concerning taxes the author wrote: “If a spouse passes away while still owing back taxes, the surviving spouse must pay the IRS both those back taxes and any current taxes owed.”
This statement is true whether or not there has been a death. Joint tax returns do not distinguish between who owed the taxes. It is “joint”.
However, there is something called “injured spouse” and “innocent spouse.” For a discussion on the difference, go to http://www.irs.gov/newsroom/article/0,,id=256031,00.html
Spouse can file “married but filing separate” —or “single”—-it is not necessary to file a “joint” tax return —-then surviving spouse is only responsible for their own taxes —
Does that apply to any taxes owed by deceased spouse , pension payments taxed and never paid by deceased spouse as well?. .. Filed separate returns since 2012. I now get a portion of his pension since his death of March2015 .. I hav not yet filed taxes.
My mom took out a burial insurance policy. However, she recently found an “Anatomy Gift Registry” where when you die, you can donate your body to the company and they pick you up, research you, cremate you, and then send you back to your family for free. She has already filled out the paperwork.
No Worry Dude! It our moral duty to know responsibilities and property of our family member after death. Its very necessary to social balance.
Most people have no burial insurance, or the compliance insurance when they die. This is now when you plan for your partner and your children so they do not get any problems later.
I’ve just subscribed to your newsletter, and printed your mini saving guide..I have some questions and I’d like to email you later.
Good tips. It is defintiely a hard topic to deal with for everyone but like you said, it has to be dealt with, otherwise the hassles for the survivors will be numerous.
-Jean
Very good advice, especially about how some debt organisations work in trying to transfer the debt of an individual to their heirs. The fact is that there is no personal liability as you correctly point out, but it’s fustrating how companies hound people at such a difficult time.
I’m the nominated executor (still some years away I hope), so I found this very interesting and useful. Thank you.