Messy estate - advice needed

[footenote]

My 56 year old brother died suddenly Feb 23.

He was working a contracting job in Los Angeles with no family nearby. His eldest adult son and I have gotten mortuary arrangements underway, cleaned out his apartment and put his car in storage.

My brother's most recent will was written when he was married to his now-ex-wife in Illinois. (They have been divorced about three years.) We cannot find a more recent will.

Assets: We have not found the title to his car (which was paid off and probably his only asset). We also cannot find any evidence that he complied with a divorce decree requirement that he carry life insurance. (As a contractor, he did not have typical company benefits.) He told me he had liquidated all his IRAs years ago.

Debts: Per his ex-wife, he was $32,000 behind on child support. He had over $100,000 in other debt, mostly credit cards.

Given these circumstances, what's the best way to sort this?

His son and I jumped in to do the most urgent basics, but should an Illinois executor now be appointed to carry out his most recent will?

The duties would be selling the car, finding and closing any bank accounts,* reimbursing the mortuary expenses (which I up-fronted) and paying creditors in the mandated order. Obviously all the creditors will be stiffed since back child support will absorb any money received from selling the car, but they still need to be notified.

If an executor isn't needed or advisable in these circumstances, any idea what to do with a vehicle whose owner has passed but left no title? (The car, an Infinity QX, is now in storage.) Can you get a replacement from the state in which it was titled?

(I reported his death to Social Security and his ex-wife understands what she needs to do to get benefits for their three minor children. Does Social Security notify the IRS or is that another task either I or an executor needs to do?)

Thanks - I appreciate any advice.

*This will be complicated as all his financial accounts were frozen Oct 2018 when the feds caught up with him. At that time, he was $106,000 behind on child support. I have no idea how he deposited his paychecks or paid bills like utilities since then.

 

[The Cosmic Avenger]

With so many debts and claims on the estate, it sounds like you should stay out of it and let the court appoint an executor. Funeral expenses are always the first to be credited by the estate, so you shouldn't have to worry about that. If you or his son try to do it, the creditors could fight you and try to hold you personally liable if they claim they should have been paid. Also, be careful selling the car; for someone who has that level of debt, I would expect they either were leasing or took out a 6- or 7 year car loan (that may not have been paid in a while).

But if you're sure he owned it outright, and you or the son want to handle the estate, you should be able to get it titled in the name of the beneficiary. I did it in NYS with the death certificate and a copy of the will (which I never probated, as the NYS exemptions allow for a generous $25K exemption for a vehicle plus $20K of household goods outside of probate). However, I have documentation that the amount that could have been subject to probate was well under those limits. (Most of his accounts were POD/TOD.)

Here are some places to start:
https://www.nolo.com/legal-encyclopedia/illinois-probate-an-overview.html
https://www.nolo.com/legal-encyclopedia/illinois-probate-shortcuts-32097.html


I'm sorry for your loss. Good luck.

 

[SecondCor521]

Wow, that is indeed messy. I'm saddened at your sudden loss and for the mess that was left behind.

I don't know much, and I am not a lawyer, but here are some things to keep in mind. I'm assuming that your brother was a resident of Illinois when he died (?).

If you have found a copy of your brother's will (it sounds like you have) or can obtain it from his attorney or the Illinois Secretary of State's office (some states allow you to register your will), then I'm fairly certain that is what must be followed regarding (a) who is executor, and (b) what happens to his assets (in this case the car).

Whomever the executor is can either (a) probate the will, or (b) seek to follow any small or simplified estate options that Illinois provides. It sounds like your brother's estate would probably qualify for one of these options, and they would be simpler/faster/cheaper to do, so I would explore those options first.

Normally creditors are notified by a publication in the nearest newspaper of record. In our state I believe they are run three weeks in a row, and then the creditors have four months to make a claim against the estate or they lose out. This way, in four months (at most) you'll know who you're dealing with. You can also notify the credit cards on your own, and they'll immediately close the accounts and send a demand letter to the executor.

Normally with the IRS, the executor would file one last tax return about a year from now reflecting his income and deductions for this year. There is a box on the return to indicate that the person is deceased, and if he's filing single, the IRS will understand the situation. The executor would also need to file any applicable state income tax returns for him for 2020.

I believe IRS and state income taxes are relatively high on the priority list, so they may even come before child support. I don't know for sure but I think child support would be above credit cards.

If he owned it, I believe the car would need to be sold by the executor to satisfy any debts, in priority order, and that would include credit cards. If you just try to keep it or title it in your name, (a) I doubt you would be successful, and (b) you would open yourself up to a lawsuit from any or all of the creditors. If it were leased or had a loan on it, I would contact the lease holder or loan holder; it is likely they would get the car back.

Also, of course, any frozen accounts with any assets in them would also need to be liquidated by the executor to pay any debts.

After the assets of the estate have been exhausted paying debts, I believe the executor can then just notify any remaining creditors that the estate is insolvent and they just record it as bad debt and go away.

 

[ERD50]

With so many debts and claims on the estate, it sounds like you should stay out of it and let the court appoint an executor. Funeral expenses are always the first to be credited by the estate, so you shouldn't have to worry about that. If you or his son try to do it, the creditors could fight you and try to hold you personally liable if they claim they should have been paid....

I'm sorry for your loss. Good luck.

Coincidentally, I just got off the phone with a relative, that has a friend in a similar situation, but the deceased ( a cousin of the friend) was out of touch with any family for years, and no one knows of any will. Deceased was in another state from the cousin/friend. Probably no money, but there is a car, apartment, and maybe a storage locker with things of value (tools of his trade). A sister in the same state as deceased has basically said she won't lift a finger to help.


[edit - sorry, I missed that you have a will, you just don't know if it is the most recent - in that case, check with local authorities, but I'd guess that the old will stands. Not getting it updated is a problem, but I doubt anyone can assume what he wanted - unless the courts have a process for that).] So the below applies I guess, until you determine for sure who the executor is... Who is exectutor on the will you have?

I gave the same advice as above - you really can't do anything until either a will is found naming an executor, or you go to the courts to get one appointed. You won't know anything in regards to probate, because you won't be authorized to look at any accounts.

And I'd be very wary that if you do anything at all, a creditor will latch on to you. Leave it to the courts.

-ERD50

 

[ERD50]

.... I'm assuming that your brother was a resident of Illinois when he died (?).

If you have found a copy of your brother's will (it sounds like you have) or can obtain it from his attorney or the Illinois Secretary of State's office (some states allow you to register your will), ... .

Yes, I'm not clear if the deceased was a resident of IL or not?

But I can say that at least for Lake County, IL, there is no process for filling/recording a will prior to death. That really seems odd to me, as it can often be difficult to find a will, or know who has it, or if it is recent. Seems that recording it would solve many issues.

When I handled my MILs estate recently, everything was in trust, plus one small checking account that was joint with DW. We didn't need to do anything at all with regards to probate, I was thinking we would need to prove it wasn't needed, but that really seems to get handled by the fact that the financial institution just won't deal with oyu if you are not the trustee or joint, or named as beneficiary (like on an IRA).

But I'm not sure how that works when there are creditors? I'm thinking it might be best to turn it over to probate, to avoid some creditor saying they had priority over someone else you already paid? Could get ugly. But then again, if there is nothing left after the ones the government forces, I guess it's not an issue?

Good luck.

-ERD50

 

[SecondCor521]

But I'm not sure how that works when there are creditors? I'm thinking it might be best to turn it over to probate, to avoid some creditor saying they had priority over someone else you already paid? Could get ugly. But then again, if there is nothing left after the ones the government forces, I guess it's not an issue?

When there are creditors, they are supposed to get paid in a certain order which is determined by law (federal I think). The executor is responsible for doing so, and if they go out of order, they expose themselves to personal liability from the creditors who erroneously got stiffed. Meaning if the OP paid the ex-wife back child support and there were federal income taxes due, the IRS could come after him for the unpaid taxes. Not sure if they would, but I think they could.

If someone names you as executor in their will, they should ask you first, since it's a big job and there is the liability issue as noted above. If you're named as executor and don't want to be for whatever reason, you can decline to serve. Then it goes to the next person in line named in the will, or if nobody's left, I think the probate court can assign an executor. Might be hard in this case, since a non-family executor would probably want to get paid, and if there's not much in the estate then there's probably not much to pay the non-family executor.

If the estate runs out of money, then, as I mentioned above, the remaining creditors get stiffed. I believe it is the executor's job to notify them of that fact; there's probably a form letter around somewhere that does that.

 

[gerntz]

footenote, if your brother is being buried & there is nothing in it for you or anyone you care about (as it sounds to me), why are you even involved in this? Me in those circumstances would let what happens, happen.

 

[footenote]

Thanks for all the thoughtful responses.

I don't think I was named executor in the last will we know about. I'll get a copy of that will and go from there.

I never had any intention of doing anything with the car myself. Nephew and I just put it in storage to prevent it being towed / impounded since none of us live in the LA area.

I don't know what state he will technically be considered to be a resident of. He had been living and working in California for at last 16 months.

I'm aware of the formal order of what claimant gets paid first, next, etc. For sure, creditors will go begging at the end of the day. (In most states, the executor and mortuary costs get paid first.) If he did indeed own the car with no liens, the sale may at least pay executor, mortuary costs and a bit more toward child support. We'll see.

Thanks again for good advice

 

[The Cosmic Avenger]

Oops...if he didn't own any property in Illinois, then California law would apply, not IL. Sorry, I missed that part.

Good luck.

 

[footenote]

To the best of my knowledge, Cosmic, he did not own any property in Illinois. I wasn't clear about that.

 

[CaliKid]

It sounds to me like he was a resident of California. Did he pay taxes to the state of Illinois or just to the California FTB? It's possible you could venue shop between California and Illinois but on the facts given, and assumptions I have made, I am thinking California.

In California the will would be invalid as to the ex-wife. Basically she would be treated as having died before your brother.

You can avoid probate in California if the total assets are below $166,250. The DMV has paperwork for transfer without probate and likewise you can use California small estate affidavits to transfer banks.

A creditor, in theory, could go after someone that received money through these small estate procedures but that's not likely in real life. So usually the creditor just loses out.

Or you can file for probate, probably have to sell the car and any other assets, satisfy creditors, pay executor, pay court costs, and the kid will almost certainly get less. I'd go with plan A if it was me.

Good luck.

 

[CardsFan]

To OP:

If you are not named executor of the will, I would back out immediately, and let things run their course. You have nothing to gain, and the possibility of taking on liability. You can emotionally support the ex and your nephews, but I would keep my hands off anything related to money or property.

You can make a claim for the funeral expenses, but in the long run, I would write that off as my last gift to my brother.

 

[MarieIG]

If the ex is no longer a beneficiary, most likely the children would be. It sounds as if this estate is more trouble than it is worth, and very, very dicey. I would turn the car over to the ex (as mother of the three children) and the oldest son. I would not touch being the executor of this "estate" with a ten foot pole. Try to work something out as to being reimbursed for funeral fees, that is something understood by the Courts should your actions ever come to be examined. I would not portray myself as an executor, and would not seek executor's fees.

 

[footenote]

To OP:

If you are not named executor of the will, I would back out immediately, and let things run their course. You have nothing to gain, and the possibility of taking on liability. You can emotionally support the ex and your nephews, but I would keep my hands off anything related to money or property.

You can make a claim for the funeral expenses, but in the long run, I would write that off as my last gift to my brother.

Assuming I am not named as executor (and I doubt I was), this is my current thinking. I can easily afford to write off the mortuary expenses; I wanted to do at least this for him.

 

[footenote]

Marie IG - Ex told me the will names his five kids (two from first marriage, three with her) as equal beneficiaries. Agree this is likely more trouble than anything else.

 

[athena53]

One data point, FWIW: my Ex died in 2010 with (likely) a negative net worth. He was a resident of FL, estranged from family members. DS, the son I had with him, was the next of kin and only a few years out of college.

His sister paid for cremation and shipping the remains to her although DS had to sign a consent for that. No problem there. I consulted an attorney in my state who said that there was no need to open an estate because there were few assets and a lot of liabilities. He said that if a creditor contacted us we should tell them that estate proceedings were not open but they were free to open estate proceedings if they wanted to. No one ever contacted any of us.

I agree with the advice to stay as far away from it all as possible other than covering his cremation expenses.

 

[Scratchy]

I agree with the advice to stay as far away from it all as possible other than covering his cremation expenses.

My condolences. It is very kind of you to want to cover his cremation. As suggested, and speaking from experience, do not continue to be involved in any way with your brother's estate or even any discussion of the estate. You are treading on very dangerous ground getting anywhere near it.

 

[pb4uski]

Marie IG - Ex told me the will names his five kids (two from first marriage, three with her) as equal beneficiaries. Agree this is likely more trouble than anything else.

Late to the thread, but I think your best course would be to give the named executor or the ex the keys to the car and whatever paperwork that you have and let them deal with it. Also give them the mortuary bill and tell them that you would like to be reimbursed (knowing full well that you might not ever get a cent).

Sorry for your loss.

 

[footenote]

One data point, FWIW: my Ex died in 2010 with (likely) a negative net worth. He was a resident of FL, estranged from family members. DS, the son I had with him, was the next of kin and only a few years out of college.

His sister paid for cremation and shipping the remains to her although DS had to sign a consent for that. No problem there. I consulted an attorney in my state who said that there was no need to open an estate because there were few assets and a lot of liabilities. He said that if a creditor contacted us we should tell them that estate proceedings were not open but they were free to open estate proceedings if they wanted to. No one ever contacted any of us.

I agree with the advice to stay as far away from it all as possible other than covering his cremation expenses.

Your experience is very similar to my circumstances and your advice (and others' advice) is helpful to me - thank you.

 

[Maenad]

My sympathy to you, your brother's children, and his exes. (I've known a couple of people whose exes died suddenly and unexpectedly - it often leads to some complicated grief.)

I echo the advice to stay away from this one. And if you're on civil terms with your brother's exes, please remind them (and any family members) that they have no legal obligation to pay off debts that your brother had. A friend lost his dad unexpectedly and had creditors calling him to claim that it would be "the right thing to do" to pay off his deceased father's debts. F*cking sleazy - trying to take advantage of a young man in his 20s who was just orphaned (mom had died years before).

So don't trust anyone who tries to get you or anyone else to cover his debts. Check with an attorney if you think there may be some merit, but once the estate is exhausted, they're pretty much SOL.

 

[pb4uski]

....please remind them (and any family members) that they have no legal obligation to pay off debts that your brother had. A friend lost his dad unexpectedly and had creditors calling him to claim that it would be "the right thing to do" to pay off his deceased father's debts. F*cking sleazy - trying to take advantage of a young man in his 20s who was just orphaned (mom had died years before). ...

+1000 Too many greedy creditors try to shame unknowing survivors into pay a decedent's debts... if they call you simply tell them that it was his debt and there is no money in the estate to pay and they are out of luck... and if they call again that you will file a harassment complaint with the appropriate authorities.

 

[Ginny]

If the ex is no longer a beneficiary, most likely the children would be. It sounds as if this estate is more trouble than it is worth, and very, very dicey. I would turn the car over to the ex (as mother of the three children) and the oldest son. I would not touch being the executor of this "estate" with a ten foot pole. Try to work something out as to being reimbursed for funeral fees, that is something understood by the Courts should your actions ever come to be examined. I would not portray myself as an executor, and would not seek executor's fees.

THIS is the best advice. Leave the estate alone. Get the car out of storage so you do not have to continue to pay for it. I doubt he has any or much money in his bank accounts, because some entity already took the money. He cashed his checks and that is how he was living, most likely.

Back away and grieve. He taught you a lesson is loss and letting go. Take care.

 

[Souschef]

+1 about creditors. When DW's aunt died, some creditor kept bothering her and asking for her aunts address. DW gave them the address of the cemetary

 

[pb4uski]

... DW gave them the address of the cemetary

Smart!

 

[yclipse]

Just as a reminder: The person named in the will as executor has no authority to do anything until he or she has been named by the court and given a written order confirming authority to act.

When someone dies owing much more than he owned, we normally leave it to the creditors to decide whether to have an estate opened.