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Old 03-19-2021, 02:15 AM   #41
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Originally Posted by SecondCor521 View Post
I think it would depend on what the applicable state law says about the prioritization of liabilities of the estate. Burial obviously is probably pretty high up on the list, if not first on it.

They could do as you suggest, but if in doing so they stiff someone higher up on the priority list then that creditor could come after them and demand to be paid. Worst case, say there's $5K in the POD account and they pay that $5K towards the funeral, and then the IRS comes and says they're higher priority than burial (probably not true but wouldn't surprise me) and then demands $5K from @thatguy's pockets. If the IRS truly were higher priority, @thatguy would have no choice but to take $5K of his own money and give it to the IRS.

Unscrupulous creditors might try the same general trick. While legally @thatguy might be in the clear, it might be a hassle to deal with them.

A safer approach would be to leave the POD account there, and point any creditors that come knocking to the bank where the POD is, and let the bank sort things out according to proper priority order. @thatguy probably won't end up with any money this way, but they also won't be out their own pocket and they'll probably face less hassle.
If the POD and IRS debt are what we think they are, we could pay the funeral with the POD and pay the IRS debt and still be ahead.
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Old 03-19-2021, 03:12 AM   #42
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One would think that body disposal, in itself not a small expense, would come before everything, as it is not optional.

Then again, if the deceased's family envisions a huge church filled with socially-distanced mourners, shiny white casket covered with roses, a full choir, two preachers, a live band, a Jumbotron, and a burial plot, all to be paid by the estate, this may give the authorities pause.

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Originally Posted by cathy63 View Post
Sadly, the law does not seem to agree with ez-probate's claim that "In fact, funeral expenses are the #1 priority in any estate and will supersede any other creditor, including taxes due to the government."

In California the priority is debts owed to Fed and State government, admin expenses such as executor fees, secured debt such as mortgages, then funerals. Here's the actual law. https://codes.findlaw.com/ca/probate...ect-11420.html

Other states may put funerals higher in their priority list than CA does, but Federal law is pretty clear that the U.S. Government gets paid first: https://www.law.cornell.edu/uscode/text/31/3713



IRS policy does allow them to waive the "we're first" claim in the case of estate admin expenses, especially if doing so would help to preserve the value of the estate assets that will satisfy their claim, but that seems to be done on a case-by-case basis and probably should not be relied on. https://www.irs.gov/irm/part5/irm_05-005-002

(emphasis theirs)
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Old 03-19-2021, 06:13 AM   #43
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Originally Posted by cathy63 View Post
Sadly, the law does not seem to agree with ez-probate's claim that "In fact, funeral expenses are the #1 priority in any estate and will supersede any other creditor, including taxes due to the government."

In California the priority is debts owed to Fed and State government, admin expenses such as executor fees, secured debt such as mortgages, then funerals. Here's the actual law. https://codes.findlaw.com/ca/probate...ect-11420.html

Other states may put funerals higher in their priority list than CA does, but Federal law is pretty clear that the U.S. Government gets paid first: https://www.law.cornell.edu/uscode/text/31/3713



IRS policy does allow them to waive the "we're first" claim in the case of estate admin expenses, especially if doing so would help to preserve the value of the estate assets that will satisfy their claim, but that seems to be done on a case-by-case basis and probably should not be relied on. https://www.irs.gov/irm/part5/irm_05-005-002

(emphasis theirs)
After further research I agree with you that funeral expenses are not first but I disagree with your assertion that government debts come first. I found numerous sources that all outline the folowing priority in general, recognizing that it may vary by state. In each case government debts come after probate administration expenses, family allowances and support and funeral expenses. Perhaps California is an anomaly (who'd have thunk that? ).

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While laws vary slightly, many states use the following order of priority for estate debts.
  • Administrative costs. The costs of administering the estate are given first priority. Common costs include court fees, the administrator's commission, filing fees, notice costs, and attorney's fees.
  • Family exemptions. Many states provide for payments to help family members pay living expenses while the estate is being probated. The family exemption is typically given a high priority so that families do not experience financial stress on top of mourning the loss of their loved ones.
  • Funeral and burial costs. Allowable expenses may be capped for funeral and burial costs by state law. In most cases, you can pay for costs related to cremation, interment, markers, urns, and costs associated with the funeral service.
  • Government debts. Debts such as property taxes, income taxes, and estate taxes take priority over other obligations.
  • Final medical bills. The medical costs for the deceased's final sickness or injury are given priority over other unsecured debts.
  • All other claims. Most states do not prioritize other general unsecured debts. In some cases, debts may be paid based on the filing date of the claim or debts may be prorated.
Some states shift the priority of the family exemptions and funeral costs. Final medical bills and estate taxes may also receive different priority based on state law.
https://info.legalzoom.com/article/w...ceaseds-estate

Quote:
Statutes fix the order in which claims against the estate are to be paid. The following payment scheme is representative:
  1. Administration expenses;
  2. Funeral expenses and expenses of last illness (up to a stated dollar amount);
  3. Family allowance;
  4. Debts given preference under federal law, such as tax claims;
  5. Secured claims (up to the value of the security interest);
  6. Judgments entered against the decedent during his lifetime; and
  7. All other claims, such as unsecured creditors.
https://lawshelf.com/coursewareconte...ditors-claims/

Quote:
Every state sets the priority according to which claims must be paid. The estate’s beneficiaries only get paid once all the creditor claims have been satisfied. Usually, estate administration fees, funeral expenses, support payments, and taxes have priority over other claims. All creditors in a certain group must be paid before creditors in the next priority group can be paid.
https://www.elderlawanswers.com/how-...get-paid-15191
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Old 03-19-2021, 07:08 AM   #44
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OMG NO, my DW is not the decedents ex.
I was confused. Went back and read the OP... sound's like OP's wife is decedent's only remaining living relative.
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Old 03-19-2021, 08:12 AM   #45
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Just to add to the pecking order in different states, Illinois law says the IRS comes third. It really does vary widely by state. Sorry for the long attachment.

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(755 ILCS 5/18-10) (from Ch. 110 1/2, par. 18-10)
Sec. 18-10. Classification of claims against decedent's estate. All claims against the estate of a decedent are divided into classes in the manner following:
1st: Funeral and burial expenses, expenses of administration, and statutory custodial claims. For the purposes of this paragraph, funeral and burial expenses paid by any person, including a surviving spouse, are funeral and burial expenses; and funeral and burial expenses include reasonable amounts paid for a burial space, crypt or niche, a marker on the burial space, care of the burial space, crypt or niche, and interest on these amounts. Interest on these amounts shall accrue beginning 60 days after issuance of letters of office to the representative of the decedent's estate, or if no such letters of office are issued, then beginning 60 days after those amounts are due, up to the rate of 9% per annum as allowed by contract or law.
2nd: The surviving spouse's or child's award.
3rd: Debts due the United States.
4th: Reasonable and necessary medical, hospital, and nursing home expenses for the care of the decedent during the year immediately preceding death; and money due employees of the decedent of not more than $800 for each claimant for services rendered within 4 months prior to the decedent's death.
5th: Money and property received or held in trust by decedent which cannot be identified or traced.
6th: Debts due this State and any county, township, city, town, village or school district located within this State.
7th: All other claims.
(Source: P.A. 100-1079, eff. 8-24-18.)
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Old 03-19-2021, 11:35 AM   #46
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^ It's this sort of thing that makes me generally use the word "generally" or "in my state" or "probably" or "I don't know". Laws differ from state to state, and there can be unusual or uncommon situations that qualify for exceptions to the general rules. And California is often a special case

I stand by my suggestion that OP not get involved and let the bank deal with the POD account, but it looks like the OP is going to do something different. And that's OK.
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Old 03-19-2021, 07:20 PM   #47
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Here as part of opening probate for my recently-deceased relative I had to provide a receipt from the funeral home showing all their charges paid in full.

It was not too expensive for cremation (~$2,500) even through a traditional full-service funeral home, paying for their cremains to be interred at the church cemetery, including a graveside service with chairs/tent.
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Old 03-19-2021, 09:12 PM   #48
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I would feel perfectly comfortable about using a POD account to pay a funeral bill.

My state too requires a copy of the paid funeral bill along with the Petition for Probate.
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Old 03-20-2021, 11:19 AM   #49
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I would feel perfectly comfortable about using a POD account to pay a funeral bill.

My state too requires a copy of the paid funeral bill along with the Petition for Probate.
What if the family needs money from the estate to pay the funeral?
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Old 03-20-2021, 01:13 PM   #50
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What if the family needs money from the estate to pay the funeral?
Some lay out the money; some take funds, if available. It depends if the funds are accessible. If the amount of the funeral costs were laying around in cash; and that was used directly for the payment of the funeral costs (with proof of payment) it should not be an issue. I did take funds out a a POD account with my Dad to pay funeral costs; but it all me, myself, and I as an only child. IIRC the estate tax returns allowed for funeral costs.
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Old 03-20-2021, 02:14 PM   #51
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I am not a lawyer, but this isn't making sense to me. If you want to walk away (likely the best move), then do it. I don't think you can do it half way. I expect any involvement may get you legally entangled.

Find out the process to disassociate yourself. Don't do anything else.

-ERD50

Best bet is to get an estate sale agency and have them put on a sale, A good agent will know what can be sold, what can be donated, and what goes to the dump and will take care of items appropriatly. In the cited quote the person is looking at personal property which may have absolutly no value such as any family pictures etc. After making a rough evalution you can decide if opening an estate makes sense. (if net value is less than 10-20 k etc). If over hire the lawyer and the lawyer and the estate sale agent will be the first to be paid. (along with funeral expenses).
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Old 03-20-2021, 05:29 PM   #52
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Best bet is to get an estate sale agency and have them put on a sale, A good agent will know what can be sold, what can be donated, and what goes to the dump and will take care of items appropriatly. In the cited quote the person is looking at personal property which may have absolutly no value such as any family pictures etc. After making a rough evalution you can decide if opening an estate makes sense. (if net value is less than 10-20 k etc). If over hire the lawyer and the lawyer and the estate sale agent will be the first to be paid. (along with funeral expenses).
I can't sell anything. If an estate is opened the PR can sell stuff.

If the cost of administration gets paid first and the cost of the funeral is paid second and there's enough left to pay the IRS, I don't get stuck with the funeral cost. What do I care how much is left for anybody else?
There are no other heirs. We don't need to make any money from it. The estate will have been properly dealt with. When It's closed, creditors can not be bothering anyone
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Old 03-23-2021, 04:57 PM   #53
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One would think that body disposal, in itself not a small expense, would come before everything, as it is not optional.

Then again, if the deceased's family envisions a huge church filled with socially-distanced mourners, shiny white casket covered with roses, a full choir, two preachers, a live band, a Jumbotron, and a burial plot, all to be paid by the estate, this may give the authorities pause.
well...maybe just everything else but not the jumbotron?! /s
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Old 03-23-2021, 05:37 PM   #54
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>What are our responsibilities from just collecting the asset & debt information

Whoever is assigned as the Executor of the estate has this responsibility. If you/your wife, are not the executor, you have no legal responsibility at all.
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Old 03-23-2021, 06:37 PM   #55
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This depends widely on the laws of the state where the decedent (dead beat) died. You don't state if your wife or yourself were named as Executor in a Will.

Assuming that there is a Will, you can have personal liability to other beneficiaries for failure to act as Executor as required under the Will. Almost all states have a procedure for you to "renounce" your obligations as the nominated executor. It may require you to file a simple Renunciation with the Surrogates Court.

If you do not want to hire a lawyer, I would contact the Surrogate in the county where the decedent resided and ask them how to renounce your obligations.
You don’t need to renounce anything. If the will is offered for probate you may renounce at that time. Being designated as executor of a will creates no responsibility until the appointment is accepted.
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Old 03-24-2021, 06:12 AM   #56
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I know others have mentioned it, but you are straddling two worlds. You need to extract yourself in completion. One example as a warning is a cousin had a situation similar to yours. Accusations were made that the cousin was spending time in the house and had removed money and property before probate. Cousin asserted he had not taken anything, but had been in the house numerous times. Is a HUGE legal mess that is still ongoing 4 years later.

If there is no money to be had, you really need to just walk away.
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Old 03-24-2021, 10:14 AM   #57
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Had a neighbor across the street from us die in hospital...was a life-long alcoholic & so apparently the "black sheep" of the family...family wouldn't even claim his body.

What they did do between the time he died & the court appointed an administrator was to come over and take whatever they wanted out of his home, including an impressive number of what were obviously rifles/shotguns (wrapped in towels, blankets, but still obvious.)

I'm sure there was nothing left of value in that home by the time they were done.
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Old 03-24-2021, 08:09 PM   #58
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We found the motherload of family pictures. Multiple photo albums spanning 3 generations. This was what we were looking for.
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Old 03-25-2021, 07:03 AM   #59
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Reminds me of the plundering of Scrooge's home, which the Ghost of the Future shows him in "A Christmas Carol."

"All I got was his sheets."

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Had a neighbor across the street from us die in hospital...was a life-long alcoholic & so apparently the "black sheep" of the family...family wouldn't even claim his body.

What they did do between the time he died & the court appointed an administrator was to come over and take whatever they wanted out of his home, including an impressive number of what were obviously rifles/shotguns (wrapped in towels, blankets, but still obvious.)

I'm sure there was nothing left of value in that home by the time they were done.
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Old 03-27-2021, 11:32 AM   #60
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Well, there is still time to change our minds, but the decision has been made to abandon this.
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