What happens if someone dies and doesn't have a Will?

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MixMasterTang

Diamond Member
Jul 23, 2001
3,167
176
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My wife's father just recently passed away and I am not sure if he had a will or not. My wife and her brother are the only ones left, but my wife had only seen him once in the last 20 years or so. I'm pretty sure he was not in good financial shape and probably has some debt. Is my wife in any way liable for this debt at all?

Please hold back on the "ATOT is not a lawyer" comments, I just was hoping for some comments from people that have been in similar situations.

Thanks
 
KLin

KLin

Lifer
Feb 29, 2000
30,222
568
126
His estate would be responsible for the debt. I believe any assets within the estate would need to be sold off to pay the debts, and the heirs would get anything that was left over.
 
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gocubs2k5

Member
Mar 15, 2005
176
0
0
the estate is only responsible for paying the debts up to how much money was in the deceased's accounts at the time. My father died in March, and he didn't have a will. He had just paid his bills and he only had like $200 in his checking account when he died. that was all the creditors could take. they got zero of his life insurance, pension, and 401k money.
 
M

MixMasterTang

Diamond Member
Jul 23, 2001
3,167
176
106
Originally posted by: gocubs2k5
the estate is only responsible for paying the debts up to how much money was in the deceased's accounts at the time. My father died in March, and he didn't have a will. He had just paid his bills and he only had like $200 in his checking account when he died. that was all the creditors could take. they got zero of his life insurance, pension, and 401k money.
Click to expand...

Okay - thanks for all of the replies from everybody! What happens to someone's pension when they die, does that become part of their estate?
 
T

tcsenter

Lifer
Sep 7, 2001
18,892
543
126
1. Nobody is liable for another's financial debts, except current spouses
2. Each state has its own laws regarding wills and estates
3. Pension benefits do not survive the pensioner except where survivor benefits were part of the pension plan. i.e. spouse or minor children may get 50% of pension benefits until the spouse dies or until the minor children become adults, but only if this is part of the pension plan

After my father died, my mother gets 50% of his monthly pension benefit until she dies, but this was not included as standard. They had to pay extra every month for survivor benefit coverage until my father died, like an insurance rider or add-on policy, which they paid for over 20 years.

Some pension plans may already include survivor benefit coverage, others definitely do not.
 
shiner

shiner

Lifer
Jul 18, 2000
17,112
1
0
I read the title of this thread as:

What happens if someone dies and doesn't have a Wii

:confused:
 
G

gocubs2k5

Member
Mar 15, 2005
176
0
0
Originally posted by: tcsenter
1. Nobody is liable for another's financial debts, except current spouses
2. Each state has its own laws regarding wills and estates
3. Pension benefits do not survive the pensioner except where survivor benefits were part of the pension plan. i.e. spouse or minor children may get 50% of pension benefits until the spouse dies or until the minor children become adults, but only if this is part of the pension plan

After my father died, my mother gets 50% of his monthly pension benefit until she dies, but this was not included as standard. They had to pay extra every month for survivor benefit coverage until my father died, like an insurance rider or add-on policy, which they paid for over 20 years.

Some pension plans may already include survivor benefit coverage, others definitely do not.
Click to expand...

I guess it all depends on the state. My parents divorced in 1980, and I am an only child. Since the deceased was unmarried I was entitled by law to 5 years of his pension in a 1 time lump sum payment.
 
JEDI

JEDI

Lifer
Sep 25, 2001
29,391
2,738
126
Originally posted by: gocubs2k5
the estate is only responsible for paying the debts up to how much money was in the deceased's accounts at the time. My father died in March, and he didn't have a will. He had just paid his bills and he only had like $200 in his checking account when he died. that was all the creditors could take. they got zero of his life insurance, pension, and 401k money.
Click to expand...

what? life insurance, pension, and 401k are off limits to creditors if you die?

that didnt get repealed/raped by the bankrupcy reform bill (which changed more things besides bankrupcy. aka a bank's wish list.)
 
T

tcsenter

Lifer
Sep 7, 2001
18,892
543
126
Originally posted by: JEDI
what? life insurance, pension, and 401k are off limits to creditors if you die? that didnt get repealed/raped by the bankrupcy reform bill (which changed more things besides bankrupcy. aka a bank's wish list.)
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Dear Certified Retard,

The bankruptcy reform act of 2005 actually EXPANDED the protection of retirement accounts and pension plans that are exempt from the estate of a debtor declaring federal bankruptcy.

Previously, only qualified ERISA retirement and pension plans were exempt from bankruptcy estate via the anti-alienation protections imposed by ERISA. Now, virtually all tax-deferred or tax-exempt retirement accounts and pension plans are afforded the same anti-alienation protections as a spendthrift trust, whether or not they are qualified ERISA plans, with some limited exceptions. e.g. Traditional and Roth IRAs are subject to an aggregate bankruptcy exclusion of $1 million.

By all [informed] accounts, the bankruptcy reform law expanded retirement and pension protections significantly. What the new law did was truly radical and extreme; requires debtors to pay their debts if they have substantial assets and/or income. Can you believe such a crazy thing as actually expecting people to pay their debts when they have substantial means to do so? Outrageous!

What next, making deadbeat parents support their children? The death of freedom and imposition of slavery by corporate interests is near complete! :roll:

BTW, the gubmint can obtain a tax-lien on retirement accounts, pension benefits, Social Security benefits - whatever it can get its grubby dibs on - in or outside of bankruptcy, which the bankruptcy reform law did not change.
 
G

gocubs2k5

Member
Mar 15, 2005
176
0
0
Originally posted by: JEDI
Originally posted by: gocubs2k5
the estate is only responsible for paying the debts up to how much money was in the deceased's accounts at the time. My father died in March, and he didn't have a will. He had just paid his bills and he only had like $200 in his checking account when he died. that was all the creditors could take. they got zero of his life insurance, pension, and 401k money.
Click to expand...

what? life insurance, pension, and 401k are off limits to creditors if you die?

that didnt get repealed/raped by the bankrupcy reform bill (which changed more things besides bankrupcy. aka a bank's wish list.)
Click to expand...

no it didn't get repealed. life insurance can't be touched in the least for creditors. I've never met anyone who had insurance money taken from them for debts of the deceased. and you are right, the 401k and pension are off limits too. it all goes by whatever you had in your bank account when you die. as a matter of fact, my father died on a tuesday, and his final paycheck was direct-deposited to his account on thursday. since it wasn't in his account when he died, the creditors couldn't touch the last paycheck either.
 
T

tcsenter

Lifer
Sep 7, 2001
18,892
543
126
Originally posted by: gocubs2k5
I guess it all depends on the state. My parents divorced in 1980, and I am an only child. Since the deceased was unmarried I was entitled by law to 5 years of his pension in a 1 time lump sum payment.
Click to expand...
Were you a dependent minor or disabled adult supported by your father? If not, then he may have purchased a survivor's benefit policy in the event of his death, or it was included in his pension plan. Some survivor benefit policies can be cashed out in a lump sum representing some prorated # of years, rather than receiving payments monthly.

Additionally, not all "pensions" are equal. Defined benefit plans are different from defined contribution plans, for estate purposes.

A defined contribution plan or investment account such as IRA or 401(k) would survive the pensioner if there was still money in it. A defined contribution plan isn't paid-out as long as the pensioner lives, as in a defined benefit plan. It is paid-out until the money in the plan/account is gone. If your father's pension was a defined contribution type, then you merely got the remaining distribution.

My father's pension was a defined benefit plan which normally would have not survived him, but for the survivor's benefit coverage my parents paid for.

life insurance can't be touched in the least for creditors. I've never met anyone who had insurance money taken from them for debts of the deceased.
Click to expand...
That's because its impossible. The proceeds paid from a life insurance policy do not exist until death (the insured event), at which point they become the property of the named beneficiary, not the deceased or his estate. The proceeds were never the property of the insured.

I suppose its possible for someone to name himself as the beneficiary of his own life insurance policy. Why they would want to do so, I don't know.
 
J

jagec

Lifer
Apr 30, 2004
24,442
6
81
Originally posted by: tcsenter

I suppose its possible for someone to name himself as the beneficiary of his own life insurance policy. Why they would want to do so, I don't know.
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So that when the invasion comes, they'll be the richest zombie on the block.
 
G

gocubs2k5

Member
Mar 15, 2005
176
0
0
Originally posted by: tcsenter
Originally posted by: gocubs2k5
I guess it all depends on the state. My parents divorced in 1980, and I am an only child. Since the deceased was unmarried I was entitled by law to 5 years of his pension in a 1 time lump sum payment.
Click to expand...
Were you a dependent minor or disabled adult supported by your father? If not, then he may have purchased a survivor's benefit policy in the event of his death, or it was included in his pension plan. Some survivor benefit policies can be cashed out in a lump sum representing some prorated # of years, rather than receiving payments monthly.

Additionally, not all "pensions" are equal. Defined benefit plans are different from defined contribution plans, for estate purposes.

A defined contribution plan or investment account such as IRA or 401(k) would survive the pensioner if there was still money in it. A defined contribution plan isn't paid-out as long as the pensioner lives, as in a defined benefit plan. It is paid-out until the money in the plan/account is gone. If your father's pension was a defined contribution type, then you merely got the remaining distribution.

My father's pension was a defined benefit plan which normally would have not survived him, but for the survivor's benefit coverage my parents paid for.

life insurance can't be touched in the least for creditors. I've never met anyone who had insurance money taken from them for debts of the deceased.
Click to expand...
That's because its impossible. The proceeds paid from a life insurance policy do not exist until death (the insured event), at which point they become the property of the named beneficiary, not the deceased or his estate. The proceeds were never the property of the insured.

I suppose its possible for someone to name himself as the beneficiary of his own life insurance policy. Why they would want to do so, I don't know.
Click to expand...

 
G

gocubs2k5

Member
Mar 15, 2005
176
0
0
the payments for my dad's pension didnt start, since was still working full time. his pension and 401k were 2 separate companies, both independent from eachother. the life insurance was purchased through his work. yes his 401 k money did survive him..once i proved he was dead that that nobody else could be a beneficiary the 401k account became mine. i cashed it out right away.
 
K

kami333

Diamond Member
Dec 12, 2001
5,110
2
76
Everyone has a will by default, your state's inheritance laws becomes your will if you don't have one written up.
 
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