my brother died...now what?

[chickweed]

My bro passed away, leaving no will. He had a $10,000 life insurance policy, $60,000 invested w/ Fidelity investments, a small house w/ a $30,000 mortgage (approx value of house $70,000). It will all go to our mom. My question is this. He also has a number ofcredit card debts, probably totalling $50,000. No judgements, just collection agencies. What can they touch; or in other words, how do I settle those debts at the least expense to my mom? Can they force the sale of his Fidelity investments? The house? Do you think I can negotiate a one time cash payout to them that is lower than the actual amount they are owed? Can someone steer me towards a good free advisor?

Thanks, deb

[mikey]

like i said on the other post....no will, then this is headed to probate court and they will hand the estate

as far as you handling it, not unless you are the estate trustee....you have basically no say

[chickweed]

Does it have to go to probate? The only surviving heirs are our mom and me. No ex wife, or kids. I thought my mom would be appointed administrator thru Surrogate court. At least that is what I got out of the initial meeting w/ a lawyer. Thanks in advance for any advice.

[gamestuf]

Almost anyone can "apply" to be the administrator of the estate during probate. Their are usually specific requirements if the person is not named in a will, it will follow the intestancy or usually spouse, parents, and siblings in that order. There would have to be notices and such sent or waivers of notice to be filed with the court. I am currently handling a probate in Washington and since I was named I have not had many problems.

When handled correctly many states qualify the debt that is payable and specify the order in which debts are paid. In Washington creditors have 4 months from the date of the probate notice to make a claim against the estate. This was designed to limit the length that probates are open to less than 1 year, if it goes over that the court usually gets involved and the administrator will be contacted by the court to speed things up. This is a special case law, to invoke it you have to file a Probate Notice, otherwise the creditors have 24 months.

You will also need to remember that some assets are considered NON-PROBATE assets and pass outside of probate and may not be attached, assigned, or otherwise touched . Be sure to check for a beneficiary before doing ANYTHING with the Life Insurance or Investments. LI with a named bf is usually non-probate and does not have to be used for the expenses of the estate it is paid directly to the bf by the company holding the policy. Investments with a named bf may also be non-probate, if the investment account has Right-of-Survivorship it may be either probate or non-probate depending so be sure to check with Fidelity and possibly a lawyer on the exact nature of this account. Be aware that there are usually tax considerations for investment accounts.

In terms of the house make sure that the administrator keeps paying the mortgage otherwise there will be a larger problem.

In my case I opened a PO Box and forwarded mail addressed to deceased there. As the administrator (who signed the form) I forwarded only those items addressed to the individual that died and not the family name. You can give anyone contacting you by phone or asking for information on the deceased the PO Box and they can send any mail there. I also updated every bank or other account with that mailing address so that I could keep the mail straight and not have to give out my address to anyone. By forwarding the mail you may also find other accounts or bills that were missed before.

In WA the estate expenses get paid first (Mortgage, Funeral, Storage, PO Box, etc), medical bills for the last six months are second, the state is third (taxes, estate expenses), federal is fourth (IRS, SocSec) and then all of the creditors. Each state has their own rules and procedures but all will have a specific order and remember that Federal expenses will top any creditor's claim to money. Many states also have an insolvency (out-of-money) clause that will kick in if there is not enough money for everyone. It usually states that you must go to court and ask them what to do. BEFORE it gets to this point turn it over to a probate lawyer!! You do not want to go to court for EVERY payment that you need to make, and any decision that you make will have to be approved by the court and it can get expensive, time-consuming and can be very frustrating. The court will not always like how the case is being handled...

In terms of the possible CC debt the administrator could make an offer for partial payment and since we do not care about a CR in this case it may show a charge-off or other. In WA the OC or CA must file a claim with the court and serve it on the administrator, if this is not done in a timely fashion then they may not be entitled to anything under your state statute. Make sure the executor understands how this process works if it is valid there. As we know many CA's do not understand the law and do not follow the law, if the administrator follows the rules and files everything correctly it may save the estate a lot of money.

I am sorry I do not have specific answers for you situation but that is the general information I have been able to gather from my personal experience.

[chickweed]

what is a charge off, and who is eligable?

[mikey]

Does it have to go to probate? The only surviving heirs are our mom and me. No ex wife, or kids. I thought my mom would be appointed administrator thru Surrogate court. At least that is what I got out of the initial meeting w/ a lawyer. Thanks in advance for any advice.

no will...its definitely going to probate court...sorry, thats the law.

and i was referring to your comment about you negotiating anything. your mom can, but u are lower in the food chain and cant do it. dont think that his past creditors will not get a chance at his estate...they will, whether they do or not, well, time will tell.