Handling a decedents debt

Dear Len & Rosie,

I have been estranged from my biological father since I was twelve years old. About six months ago he called up and said that he was dying and would like to cultivate a relationship. This man is a dead-beat. He still has a pending child support claim against him, somewhere in the neighborhood of $15,000 to $20,000. My sister and I are 24 and 27 respectively. Is there any way to protect ourselves from having to absorb his debts upon his death? I believe that he has incurred a moderate amount of credit card debit. He currently does not own any real property or have any life insurance policies. As I understand it, he was married to another woman for a number of years, however she died a few years ago due to cancer. I am not aware of any other children that he may have had. I assume that it is a possibility that he does have other children. I am also aware that he currently receives SSI due to being partially blind.

I am not trying to be insensitive to his situation, but I want to make sure that we are as financially protected as possible since we are both relatively young and just beginning our own lives with our own families.

Jamie

Dear Jamie,

While it is fashionable to call fathers who fail to pay child support as "deadbeat dads", you should try to avoid this. Your father is disabled and dying and broke. He isn't one of those well-off parents who refuse to provide for their children out of spite. He may have failed to support his children, but it's clear that he hasn't been able to take such good care of himself either.

Fortunately, you are not responsible for any of your father's debts upon his death, unless you are a cosigner on his accounts or his credit cards are in both of your names. So don't worry about it. You will not have to pay off his credit cards, or his landlord, or anything like that.

What you do have to be concerned about is his funeral and burial or cremation. Whatever little money he has left upon his death may not be enough to pay for his final expenses. Under California law, his next of kin, that's you and your sister, will be legally responsible for his burial or cremation if he dies improvished. But before you run for the hills, please understand that this would be the case whether or not you have a relationship with your father. You'd have to pay these expenses even if you are completely estranged from him upon his death.

You can prepay your father's cremation or burial with a mortuary. What they'll do is to put the money into a fully paid up life insurance policy that will pay for his final expenses upon his death. Make sure that the policy is irrevocable, because if your father can cash it in, it will count as an asset that could disqualify him from SSI. It may be easier for you to set aside some money in your own name to pay for your father's final expenses rather than set it up at a mortuary in advance.

As your father is on SSI, he is also on Medi-Cal. Upon your father's death, whatever is left in his bank account after the payment of his funeral and burial expenses will be subject to a Medi-Cal estate claim for whatever Medi-Cal spends on your father after his 55th birthday, or any Medi-Cal expenses paid on his behalf while in a nursing home. There won't be any money left, and his credit cards will never be paid off. Except for a few personal mementos, all you will have left of him after his death will be your memories, so don't lose the opportunity to make a few more good memories before he has to go.

Len & Rosie