Jump to content

Skypilot54

Collection Letter to deceased dad

Recommended Posts

Hi all.  It's been quite awhile since visiting here, but I have an unusual situation where I can use some guidance.  My 90 year old dad has been in and out of the hospital since last May.  For years we had no idea how bad his financial situation was, but it was clear he had been in trouble for a long time.  He's had two BofA cards that were maxed out and which he stopped paying on back in May.  Prior to this he was only sending them $25/month, thinking that would keep him out of trouble.  This last round he had been in the hospital since before Christmas.  My sister was collecting his mail and he received a collection letter on Friday 1/31 on these two cards.  Unfortunately, he passed on 2/2 and we just got back from his funeral.  He has no assets except his house which has a mortgage on it, and his life insurance doesn't even cover his funeral expenses.  He was barely making it on his social security check.  My question is, since he is now deceased, should we start with the usual validation process, or reply to the letter saying he is now deceased?  In his will he bequeathed the house equally to his five children (our mom passed back in 2008), so technically after all of the paperwork is done, the house belongs to the five of us.  Any guidance would be appreciated.  I'm going to be away again for a few days so I won't be able to respond to any questions until Wednesday at the earliest.  Thank you in advance.

Share this post


Link to post
Share on other sites

Condolences on your loss. 

 

The executor/executrix of the estate has obligations to place notices to all persons who may hold claims against the estate. 

 

My experience as an executrix of two different estates is that replies are rarely generated through the notice placed in the legal section of a local newspaper.  After the passage of time, usually 90 days, distributions are made to the heirs (if there are any assets TO be distributed.  Where a letter DOES come in from an entity holding a claim, the letter to them with a death certificate generally was the end of the matter. 

 

Any effort to dispute the claim should be written by the executor/executrix since they step into the shoes of the deceased for all intents and purposes.  It is up to them as to whether they want to try and dispute the claim or simply include the death certificate.  I did actually have ONE call as a follow-up with my grandmother's estate demanding to speak with her...I put them on hold and then gave them the number to the cemetery.  The matter has since been closed with no further contact.   

Share this post


Link to post
Share on other sites

Thank you Centex.  My sister has been in contact with my dad's attorney's office regarding his will and other issues.  The attorney who prepared his will has since retired and another attorney will handle is estate, or lack thereof.  

Share this post


Link to post
Share on other sites
On 2/7/2020 at 11:50 PM, Skypilot54 said:

He has no assets except his house which has a mortgage on it,

....

In his will he bequeathed the house equally to his five children (our mom passed back in 2008), so technically after all of the paperwork is done, the house belongs to the five of us.  Any guidance would be appreciated.

You understand you won't get the house free and clear right? The mortgage would still need to be satisfied. Depending upon any equity in the house, the heirs might get a little something, or if the house is underwater or has a judgement lien placed against it - The mortgage company will get theirs and other creditors get bumpkus.

 

Whatever you do, don't let the creditors bully any survivors into paying.

Share this post


Link to post
Share on other sites
On 2/8/2020 at 10:39 AM, centex said:

Condolences on your loss. 

 

The executor/executrix of the estate has obligations to place notices to all persons who may hold claims against the estate. 

 

My experience as an executrix of two different estates is that replies are rarely generated through the notice placed in the legal section of a local newspaper.  After the passage of time, usually 90 days, distributions are made to the heirs (if there are any assets TO be distributed.  Where a letter DOES come in from an entity holding a claim, the letter to them with a death certificate generally was the end of the matter. 

 

Any effort to dispute the claim should be written by the executor/executrix since they step into the shoes of the deceased for all intents and purposes.  It is up to them as to whether they want to try and dispute the claim or simply include the death certificate.  I did actually have ONE call as a follow-up with my grandmother's estate demanding to speak with her...I put them on hold and then gave them the number to the cemetery.  The matter has since been closed with no further contact.   

 

So I'll begin with the initial qualification of "INAL" (I am not a lawyer, for the unfamiliar).  So, obviously, any question I pose is entirely uninformed of the pertinent legal facts (which, of course, is why I would ask it).  Please don't get on my case for doing so ...

 

I grasp that credit card debt is unsecured.  However, doesn't an outstanding credit card debt have a claim on the estate, as with any other unsecured debts? 

 

I understand the bequest of the house to the heirs.  However, my understanding is that if their isn't sufficient assets in the estate to satisfying outstanding claims, any assets (including those specifically tagged for inheritance by named beneficiaries of the estate) must be liquidated to settle unpaid claims.  Any residual proceeds would be distributed in lieu of the property to the beneficiaries.

 

Obviously this applies with respect to debts secured by the property in question (i.e. the mortgage and the home).  I presume that the credit card issuer would likewise have a claim that should be settled by the executor prior to distribution of the home sale proceeds.

 

A key exception to this procedure would be any property that is titled in the name of other people in addition to the decedent.  If the home was titled jointly to at least one other person, with full rights of survivorship, then the house passes to the surviving owner without inclusion into the estate.  (As such, any bequest to any other parties would likely be void, and it would be at the option of the remaining owner(s) to divide the property proceeds/value to any non-owners that had been named in the bequest -- likely without the benefit of estate tax exclusions; gift tax exemptions would be applicable, but would have a consequence in terms of any remaining exemption limit enjoyed by the grantor.)

 

A quick internet search (FWIW) surfaced the following relevant discussion:

https://info.legalzoom.com/can-executor-forced-sell-property-pay-debts-23445.html

 

Obviously, varied state tax law impacts the general guidelines I suggest above.

 

I'd appreciate any constructive input that will help set any misapprehensions back on track.  (That's a specific entree to you, legaleagle ;) )

Share this post


Link to post
Share on other sites

bump

 

my post wasn't intended as a thread-kill.  There are specific takes here on this subject that run counter to my thoughts and I really was looking to better understand them.

Share this post


Link to post
Share on other sites
On 2/15/2020 at 5:02 AM, hdporter said:

 

I grasp that credit card debt is unsecured.  However, doesn't an outstanding credit card debt have a claim on the estate, as with any other unsecured debts? 

 

I understand the bequest of the house to the heirs.  However, my understanding is that if their isn't sufficient assets in the estate to satisfying outstanding claims, any assets (including those specifically tagged for inheritance by named beneficiaries of the estate) must be liquidated to settle unpaid claims.  Any residual proceeds would be distributed in lieu of the property to the beneficiaries.

 

Obviously this applies with respect to debts secured by the property in question (i.e. the mortgage and the home).  I presume that the credit card issuer would likewise have a claim that should be settled by the executor prior to distribution of the home sale proceeds.

 

A key exception to this procedure would be any property that is titled in the name of other people in addition to the decedent.  If the home was titled jointly to at least one other person, with full rights of survivorship, then the house passes to the surviving owner without inclusion into the estate.  (As such, any bequest to any other parties would likely be void, and it would be at the option of the remaining owner(s) to divide the property proceeds/value to any non-owners that had been named in the bequest -- likely without the benefit of estate tax exclusions; gift tax exemptions would be applicable, but would have a consequence in terms of any remaining exemption limit enjoyed by the grantor.)

 

Obviously, varied state tax law impacts the general guidelines I suggest above.

You are correct about claims upon the Estate.  This is the reason for the posting in a legal notices section of a newspaper or other regular publication local to the deceased.  Depending on jurisdiction, the timing is generally a 90-180 day notice, after which the claims will have effectively been extinguished. 

 

Specific notice to every known creditor is NOT a requirement.  The Estate Codes generally hold that the publication suffices as notice to ANYONE holding a claim. 

Share this post


Link to post
Share on other sites
2 hours ago, centex said:

You are correct about claims upon the Estate.  This is the reason for the posting in a legal notices section of a newspaper or other regular publication local to the deceased.  Depending on jurisdiction, the timing is generally a 90-180 day notice, after which the claims will have effectively been extinguished. 

 

Specific notice to every known creditor is NOT a requirement.  The Estate Codes generally hold that the publication suffices as notice to ANYONE holding a claim. 

 

Appreciate the feedback.  Just confirm or correct:  The receipt of a credit card statement sent to the deceased is sufficient to establish a claim against the estate, right?

 

Additionally, if you were the executor of an estate (after death of a parent, for example), wouldn't you want to proactively notify the issuer of any credit cards issued to the decedent to minimize the risk of fraud that otherwise might complicate settlement of the estate?

Share this post


Link to post
Share on other sites
49 minutes ago, hdporter said:

 

Appreciate the feedback.  Just confirm or correct:  The receipt of a credit card statement sent to the deceased is sufficient to establish a claim against the estate, right?

 

Additionally, if you were the executor of an estate (after death of a parent, for example), wouldn't you want to proactively notify the issuer of any credit cards issued to the decedent to minimize the risk of fraud that otherwise might complicate settlement of the estate?

I would generally concur that the statement should be sufficient, provided it was received in a timely manner. 

 

And yes, I would recommend calling to cancel cards.  However, that action is not always processed for notice purposes since some of the phone jockeys don't actually seem to comprehend "deceased." 

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.





  • Today's Birthdays

    No users celebrating today.
  • Member Statistics

    • Total Members
      178,222
    • Most Online
      2,046

    Newest Member
    Missbling
    Joined

About Us

Since 2003, creditboards.com has helped thousands of people repair their credit, force abusive collection agents to follow the law, ensure proper reporting by credit reporting agencies, and provided financial education to help avoid the pitfalls that can lead to negative tradelines.
×
×
  • Create New...

Important Information

Guidelines