Advice Needed on Handling an Estate with No Will

[gailwinters]

A close family member’s 23 year old daughter passed away recently. She had no assets beyond a 10 year old car. She also left behind several thousand dollars in past due medical bills. The only source of cash is possibly a tax refund, because she hadn’t filed for 2022. He’s not sure he has all of her tax information, but he did find W2s from a couple of places she worked.

The death occurred in Arizona, father is in NC. In order to be named as her personal rep, he will have to travel again to Arizona. He can file her final tax return without being officially named her personal rep, as I understand it. The other sticking point is disposing of the car. He had planned to donate it to a charity there. The key can’t be found, and he would have to be her personal rep in order to get a clear title. He received several notices for “the estate of ——“ from collection agencies on the medical bills. It’s a big mess, adding to the stress of losing his daughter.

He has asked us for advice about what to do. We are leaning toward “Do nothing”.
We’re just not sure if that’s the best way to go.

 

[OldShooter]

I would suggest that they consult an AZ trusts 7 estates attorney with the "do nothing" bias. Your advice sounds wise but probably a brief consult would be a good idea.

 

[njhowie]

He has asked us for advice about what to do. We are leaning toward “Do nothing”.
We’re just not sure if that’s the best way to go.

I would also go with do nothing. No assets = no estate, no will = no executor or personal representatives. Advise relatives to play dumb. Let any creditors owed something figure out what they will do.

https://www.consumerfinance.gov/ask-cfpb/does-a-persons-debt-go-away-when-they-die-en-1463/

Generally, no one else is required to pay the debts of someone who died. When someone dies, their assets pass to their estate. If they die with an unpaid debt, it should be paid from any money or property they left behind, if state law requires that it be paid. If there is no money or property left, then the debt generally will not be paid. For example, when state law requires the estate to pay survivors first, there may not be any money left over to pay debts.

 

[all4j]

Not clear from what you said, but the case would fall under Arizona 'intestate' laws -- which I'm not familiar with. An internet search will give the highlights. It can be a zoo. Hopefully, he hadn't co-signed any loans etc. & likely will not have to get closer than N Carolina is from Az.

Might want to remind him at a non-sensitive point to make sure his estate plan is updated appropriately.

 

[Walt34]

I agree with the others, talk with an AZ attorney, but probably his advice will also be "do nothing".

As far as the creditors go, that is one of the risks of extending unsecured credit and all the lenders know that. Or should know it.

 

[easysurfer]

I like the idea of not waking a sleeping dog .

 

[Mark1]

Agree with the do nothing advise, including the tax refund. What to do with the car seems less clear to me.

 

[38Chevy454]

I agree, do nothing. Let the state deal with it.

Long story made short. My aunt died as essentially destitute and I was closest relative. No will or anything else. Medical bills, one vehicle worth few thousand dollars, no other real assets. Talked to estate attorney in her state, which was 1500 miles from mine, and he suggested stay away; don't subject myself to the headaches and hassles. I had nothing to gain and only time and aggravation to lose. I stayed clear, her car was at a friend's house, i told them to keep it. They could file for title as abandoned vehicle, and they did have a key. State covered cremation and disposal of ashes. Any creditors had to write off the debt.

 

[ERD50]

I agree with the others, talk with an AZ attorney, but probably his advice will also be "do nothing".

As far as the creditors go, that is one of the risks of extending unsecured credit and all the lenders know that. Or should know it.

Agreed, and I'll add a cautionary note, DO NOTHING until you talk to that lawyer (or at least educate your self on AZ law). IANAL, but from what I've read, if you start doing anything, that can break the 'do nothing' protection, and now you are involved.

I'm guessing the state of AZ can handle all of this, w/o any involvement from the parent in NC. It's a sad, sad situation, but no reason to get drawn into these trivial details of settling a small estate. Let them grieve.

Just my 2 cents.

-ERD50

 

[SecondCor521]

In my state (not AZ), under the laws of intestacy, the net estate, if there were one, would be split equally between the parents.

In this case, with a tax refund and a car as assets probably more than offset by the medical debts, the estate is likely insolvent and the parents wouldn't get anything. Not to mention that any travel to AZ would probably be more needless expense. So I agree with the "do nothing" advice.

But I would go one step further and say that the income tax refund legally should go to pay the daughter's debts, which would be burial costs, final taxes, and then those medical bills. So I would recommend the parents either (a) not file the final tax return or (b) file it and use the refund to pay the debts of the estate in the proper priority order. I don't think it would be right or legal to claim the daughter's final tax refund and just keep it.

Can the parents get the refund and pay the debts without opening an estate? I think probably so. It does open them up to making a mistake and not paying in proper priority order. If they pay out of order, the creditor who should have gotten paid but didn't might sue the parent(s). But if the amounts are small and the bills not paid are medical, I think in practice there wouldn't be a suit just because the cost of the attorney would be more than the amount of money involved (the money that should have been paid but wasn't, not the value of the entire medical bill).

 

[Blue Poles]

I know the car is 10 years old, but if she bought it used and has a loan on it, then it's the lien holder's problem to recover it.

 

[HarveyS]

I'll suggest a different plan.
The father should do what he can to clean this up. Contact a lawyer and find out how to do this correctly.
What about where she was living? Is there something of possible sentimental value that should be saved? Can her household belongings be donated to a charity? Did the deceased have a bank account or credit card? Was there a life insurance policy associated with either, if they existed? Don't just leave the car where it -- it then becomes someone else's problem at sometime in the future when it becomes obvious it is unclaimed property.

It will be a bit of a PITA to do this. If he does not clean this up, it may haunt him. Regrets in life are usually over what we didn't do, not what we did.

 

[gailwinters]

Thanks for your thoughtful replies.

For clarification, there was no car loan. Father cleaned out her apartment and there was nothing of value, beyond some sentimental items.

Father has already paid for cremation.

 

[Badger]

I didn't think anyone would be legally responsible for her debts except maybe a spouse or co-signer of a loan but that doesn't seem to be the case. If assets and debts are a "wash" or at least close to it I wouldn't think it would be worth the trouble.

Cheers!

 

[athena53]

My Ex died penniless with no will and owing a lot of debts about 20 years ago. He was in FL, we (DS, his next-of-kin and I) were in KS. Ex's sister took care of the cost of having him cremated and shipping the cremains to her (with DS's signature).

An attorney in KS that I consulted at the time said that if a creditor called us, I could tell them there would be no estate proceedings and if they wanted to open an estate they were free to do so but there were no assets. No one ever did.

From this and all the advice/observations above, it sounds like your friend doesn't have to do much of anything if at all.

 

[pacergal]

I would choose to either do nothing or a one time consult with estate attorney in Arizona.

I am sorry for the loss of your family members daughter.

 

[Stormy Kromer]

Sorry for your loss 23 is way too soon.