Brother Died With Debt, But No Assets

Dear Len & Rosie,

My wife’s brother recently died. As nearest kin, she’s handling his affairs and hopes to keep it as simple as possible. Mostly, his affairs are very simple: no spouse, no real estate, and no bank accounts. We have already cleaned out his apartment and directed that his mail be forwarded to us. He owned a new truck, on which more is still owing than we could sell it for. Also, it appears he had a few credit cards with balances owing. Are we responsible for these things? How should we proceed?

Kent

Dear Kent,

No bank accounts in this day and age? That’s unusual but not impossible. We suppose he could have cashed his Social Security check each month at the bank and paid his landlord in cash or with a money order. From what you’re telling us, all he owned on his death was his personal possessions and his automobile, which wasn’t even paid off. It’s obvious that your brother-in-law’s estate is insolvent.  
The automobile loan is secured by a lien on your brother-in-law’s truck. Since the value of the truck dropped by several thousand dollars the moment your brother-in-law drove it off the dealer’s lot, your wife cannot possibly sell the truck for enough money to pay off the loan. Fortunately, she doesn’t have to. All she should do is to contact the lienholder (the bank that gave your brother his loan) and turn the truck over to them. It’s their problem. They’ll just do a repossession and a lien sale.

With respect to your brother-in-law’s other creditors, your wife should send them a death certificate and a letter explaining that her brother died without an estate, that there are no assets to pay them off, and that there will be no probate. Don’t even bother sending original death certificates. A photocopy will do just as well and your wife shouldn’t have to pay for death certificates out of her own pocket. The banks should write off the credit card debt for the simple reason that they can’t squeeze blood out of a turnip.

It is important to know that your wife is not personally responsible for the debts of her brother under any circumstances unless she was a cosigner on his debts. Only the assets owned by your brother-in-law upon his death are subject to the claims of his creditors. The one single exception to this is that her brother’s next of kin are legally responsible for his cremation or burial expenses.

Your wife’s brother was likely on Medi-Cal benefits, if he owned so little. It’s important to notify the Department of Health Care Services of his death, and it’s important to keep his death certificate and any account statements handy so that you can show Medi-Cal there are no assets subject to its estate recovery claim.

That leaves your brother-in-law’s personal property. Technically, his personal possessions are assets of the estate and should be liquidated to raise money to pay off his creditors. But in practice, this never happens unless the personal property is of significant value. Your wife can keep her brother’s belongings for herself, and give what she does not want to charity.

Len & Rosie

Is My Dad's Will Private or Public

Dear Len & Rosie,

My father made out his will. Don’t all three of his children get a copy of it? My sister has my father’s power of attorney and she is the executor of his estate, but she won’t let my brother or I see a copy of his will or a list of his monthly expenses. She says that only she should know about father’s money and what is in his will. I DO NOT trust her or her husband. Please tell me who is right - Her or me? I want, at least, to see his will and have a copy.

Jean

Dear Jean,

The obvious question that comes to mind is “Why not ask your father for a copy of his will?” We can only assume that you have already asked, and he said no. Either that or your father is incapacitated and is incapable of giving you the will or even asking his lawyer to provide you with a copy.

Neither you nor your brother have an inherent right to see your father’s will until he has passed away and it is lodged with the probate court. When that happens, your father’s will becomes a public record that anyone can see. If your father does not want you to know what is in his will while he is still living, you are out of luck. He has the right to keep his estate plan private.

If your father created a trust to avoid probate, it’s even more private. When your father dies, the trust document does not have to be delivered to the court. But you and your brother, and all of the other trust beneficiaries, are entitled to a copy of the trust, but only when the trust becomes irrevocable upon your father’s death.

Your question about your father’s expenses has a similar answer. An adult daughter does not have a right to look at her parents’ checkbook. If your father has the ability to make his own decisions, and if he trusts your sister to take care of everything, then that is his business, not yours.

But our guess, and we’re reading between the lines here, is that your father may not have the capacity to make his own decisions. He may be in an assited living facility somewhere, and maybe your sister is using the power of attorney to pay his bills and manage his finances. If this is the case and you have reason to believe that your sister is taking advantage of your father, then you should consult with an attorney and consider filing for conservatorship. You don’t have the right to any of this information yourself, but if you are appointed as your father’s conservator, you will gain standing to review all of his finances.

Unless you become your father’s conservator, you cannot compel your sister give anyone an accounting of her activities as his attorney-in-fact while your father is still alive. And no one other than the court or your father can take away your sister’s authority to manage his assets. If your father cannot give you the answers, and your sister refuses to do so, then your choice is between letting your sister take care of everything, and confronting her in court.

                        
Len & Rosie