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insolvent estate - almost zero assets and debt

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naobaos

Junior Member
What is the name of your state (only U.S. law)? CA

My grandmother very recently passed away at 94, leaving $6K in credit card debt. She had a trust (about $3K) for burial or cremation, but since that didn't even cover the cost of a plot, I had to choose cremation. I can't afford to pay anything out of pocket. There will be a small amount left over, about $1.5K. She has no other assets at all, my mother did an excellent job of wiping her out financially and then kicking her to the curb, just as her health started to deteriorate three years ago. My mother didn't know about the trust, as she could not find the paperwork (Nana was a hoarder). My grandmother had no other debts. To make a long story short, I was made executor of the estate and my mother was written completely out of the will.. There are no other relatives. I need to make some repairs to my home, as over the last three years there were many "accidents" that I tried to clean the best I could at the time... some of the carpets need to be replaced.

What should I tell the credit card company? Do I need to pay them what ever extra is left over from the $3K? Do I need to declare an insolvent estate? If so, How? I'm very worried that if I pay any amount to the CC, which is supposed to be fairly low on the priority for payments, that other claims might surface where suddenly I am liable for those debts because I paid the unsecured debt first.

Thanks,
Naomi in CA
 


OHRoadwarrior

Senior Member
Contact the credit card companies, advise them of the balance after grandmas cremation and send them a proportionate share of the balance. You get nothing.
 

tranquility

Senior Member
If you are the executor, and have been approved by the courts, you have to go through probate. If you affidavit the small estate provisions on an insolvent estate, you get stuck with the problem you're talking about as you don't get to use probates hierarchy of payments. But, I agree, you are a very low level creditor except for burial/cremation expenses.
 

naobaos

Junior Member
I used the word "trust", because I don't know how to define it. It was essentially a paid burial/cremation expense that my grandmother had with a funeral home in Montana about 15 years ago. I was able to transfer it to a funeral home locally, so her cremation expenses were paid for before she died. Like I said, I didn't even know she had this until I went through all of her stuff while moving her in with me.

I see there is a $395 court filing fee, as well as some other fees for probate. Can I just walk away from the whole thing at this point? I'm not THAT interested in the remainder, I have not received it yet anyway. I think I would be an unwilling executor, I don't know what the ramifications are. I'm going to be a full time student in about a month, and will not have the time. My husband will definitely not want me to be liable for any debts and would rather not see a penny than have me jump through so many hoops.

I don't think I'm approved by the courts as an executor, I honestly don't know what this means. I didn't file any papers in CA with the courts. The POA, will, executor documents etc. were all transferred to me in Washington State by an estate lawyer three years ago. I had to travel there to take care of all this.

Thanks to all the previous replies so far, they have pointed me in the right direction, I hope!
 

anteater

Senior Member
Niceties aside... I would just walk away. You aren't under any obligation to open probate and seek appointment as executor.
 

naobaos

Junior Member
"The problem is OP has the remainder of grandmas money after cremation. She is not legally entitled to it."

I think this is the crux of the problem. I have not yet received the remainder. If it is a check, what if I don't cash it?
I could write "return to sender" on the envelope, or return the remainder with a letter saying I refuse to be the executor.

All of the replies have been helpful, thanks.
 

anteater

Senior Member
The problem is OP has the remainder of grandmas money after cremation. She is not legally entitled to it.
Apparently, not yet.

And, as much as I oppose stiffing legitimate creditors, if the check for the remainder is made out to her personally, I would keep it. The amounts involved here just aren't worth messing with.

If the OP is leery about keeping it, she can just hold on to the check and wait to see if any of the creditors open probate.


My husband will definitely not want me to be liable for any debts and would rather not see a penny than have me jump through so many hoops.
Even if you were to open probate, you would not be personally liable for your grandmother's debts.
 

OHRoadwarrior

Senior Member
That could be concealment of assets or potentially theft of assets. OP's best outcome is likely to file a Petition for Letters of Administration, to have the court appoint someone to process the estate.
 
Last edited:

anteater

Senior Member
That could be concealment of assets or potentially theft of assets.
Geez... We're talking about maybe $1,500 here. That may or may not even be subject to creditor claims. Exactly what grandmother had set up is unclear.


OP's best outcome is likely to file a Petition for Letters of Administration, to have the court appoint someone to process the estate.
Why? As in, why should the OP make even that much effort? If the creditors want to do it, let them spend the money to do so.
 

OHRoadwarrior

Senior Member
The purpose of this forum is not to direct people to commit crimes. OP keeping the money is clearly in violation of CA probate code. Here is an excellent article on the subject provided by the state of CA.

http://www.clrc.ca.gov/pub/BKST/BKST-L4100-NPT-Creditors.pdf


Geez... We're talking about maybe $1,500 here. That may or may not even be subject to creditor claims. Exactly what grandmother had set up is unclear.



Why? As in, why should the OP make even that much effort? If the creditors want to do it, let them spend the money to do so.
 

commentator

Senior Member
I wouldn't do a thing except cash that check. You don't have to pay off the credit card debt she created, and even if you let one or another of them get the full huge amount of the $1500, they're not even going to be paid off in full. Okay, so they call her up and threaten to ruin her credit. I wouldn't even talk to them, either. Even with cremation, I'll bet the burial policy didn't cover all the final expenses for your grandmother. Much less her final care. Do I understand that you kept her in your home for the last few years? Bravo.
 

anteater

Senior Member
I wouldn't do a thing except cash that check.
You realize that you are advocating the commission of a crime, don't you? :D


tranquility
Don't open probate. Let the remainder money be. Walk away.
I agree, except, if the check for the remainder is made out to the OP, I would say deposit it and purchase a CD. And then wait to see what unfolds. My first guess is that the funeral home will make the check out to grandmother or the estate of grandmother, in which case the OP can't do anything with it anyway.

My second guess is that, if it does happen to be made out to the OP, none of the creditors are going to open probate to chase $1,500 or so (less the probate fees and administration costs). What's the worst that happens? The OP receives a request to hand it over to the probate estate's personal representative/administrator. The SWAT Team isn't going to break down the doors.

By the book? No. Real world? Even creditors know how to do a cost/benefit analysis.


commentator
Do I understand that you kept her in your home for the last few years? Bravo.
+1

And the primary reason that I look at this case with a heavy dose of pragmatism.
 

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