Financial Question

[rmm17]

Hi,

My mom has close to 100,000 dollars in medical bill debts. She is not working and is now collecting welfare benefits. She also has a house that is not completely paid for although she has kept up with the house payments. My question is...what happens to all her debt if she passes away? She is not married so does this debt go to me? I know they can take her house, but can they take the money from her life insurance benefits? She recently told met she has a 50,000 dollar policy. Do you all know anything about this?

[jhllal]

Generally, if the insurance is payable to your mother's estate, it can (and will) be used to pay her debts. If the insurance is payable directly to you, it should not be subject to the claims of her creditors.

[Gwen, Daddy's girl]

You are not responsible for anyone elses debt unless you signed and gave your social security number.

[marym]

Hi,

You do not have a responsibility for the debt. Also, life insurance with a named beneficiary belongs to the beneficiary and cannot be used toward debt.

The house would need to be sold and used towards the debt, as would any other assets left behind.

I'm sorry to hear that in addition to all the medical situations you have to deal with, that financial matters are also a concern.

Best wishes.

Mary

[RandyW]

try rhis link if you need to check or possible help. Clark howard is a great consumer advocate with a wealth of knowledge. Many more topics here. Click to be redirected;

http://clarkhoward.com/

[Linda661]

I'm deep in estate issues now, so I'll try to comment on what I know so far....the debts your mom carries will be paid by her estate, not you. If her estate cannot pay them all, that's the way it goes and the creditors lose out as far as I know. It's always possible that creditors could try to challenge though -- if that were the case, you still wouldn't be personally liable.

There are what are called probated assets and non-probated assets. Anything with a named beneficiary is a non-probate asset (i.e. the court doesn't intervene on what happens to those non-probate assets). Things like life insurance policies should have a named beneficiary. If anyone other than the estate is named as beneficiary of the life insurance policy, it's a non-probate asset and not up for creditors of your mom's estate to go after (to my knowledge).

How your mom has her house titled will probably also matter. If the house is only in her name, then whatever equity and debt she has in it will go to resolving probated estate issues. If you or other family members are named on the title, I would imagine that the bank can ask for you or any other titled family member to carry the remaining debt on it as a co-owner or sell to satisfy their debt claim.

Your mom's state laws will matter alot on this issue. Please be sure to check out the links others have given you in this thread.

Linda