A loved one’s death is a significant loss that, if you are
responsible in some way for their wills
and estates, can also leave you with the job of sorting out their
final accounts. Many have discovered debts in their loved one’s name, which
need to be repaid. Yet who
is responsible for a deceased person’s debt? You might be surprised to
learn that there is more than one answer.
What Is an Estate, and Why Is It Important?
An estate comprises everything of value that a person owns
at the time they pass away. Generally speaking, any bills left behind after a
loved one’s death must be paid from their estate. This can be done by selling
their assets to raise money for the debts or be as simple as writing creditors
a check from their bank account. What’s left after these payments can then be
distributed via the probate process.
If there isn’t enough in a person’s estate to cover their
debts, it may simply be that creditors don’t get paid. However, this only
applies to certain kinds of debt. Other kinds can end up the responsibility of
family members. Let’s take a closer look at these different debt types and what debts are forgiven at death.
Money Owed on Credit Cards
If your loved one has a balance pending on one or more
credit cards and had a joint account with someone, that person will have to pay
the debt. However, should there be no assets left in a loved one’s estate to
pay these bills, creditors will not receive any money. This is because credit
card debt is unsecured, meaning that the lender has no rights to claim assets
for the purpose of debt repayment.
However, there are many ways around this. For example, a
credit card company can send your loved one’s account to a collection agency,
which may hound you with phone calls to try to get you to pay them. As well,
they can order a lien to be placed on your loved one’s assets until you pay
them, which can make it impossible for you to pay any other debts.
A credit card company may also try to sue you for the money
owed, which can lead to garnished wages.
Money Owed on a Mortgage
If your loved one co-owned
their home with another person, or if the house will be inherited by a specific
individual, the co-owner or devisee (a person
to whom real estate is left by the terms of a will) will be responsible
for the remainder of the mortgage payments. In the event that your loved one
was the only one who owned the home, their estate is responsible for paying
this secured debt.
Money Owed on Home Equity Loans
Another secured debt, an outstanding amount left on a home
equity loan must be repaid. If the lender wants the full amount owing right
away, the house may have to be sold if there are insufficient funds in the
estate. However, anyone who is inheriting the home can ask the lender about the
possibility of taking responsibility for these payments.
Money Owed on a Vehicle
If you are responsible for your loved one’s estate, you will
have to pay any outstanding car loans from that estate if there are sufficient
funds to do so. Like mortgages, car loans are secured debts. That being said,
if the loan cannot be paid for, the asset—which is the vehicle—becomes the
collateral and can thus be seized following the placement of a lien on it by
Should a friend or family member inherit the vehicle, it
will be their responsibility to continue paying the loan. Otherwise, they run
the same risk of repossession.
Other Loans that Are Owed
If your loved one had a student loan that was granted
privately from a family member, that debt should be repaid by their estate.
Once again, if there was joint ownership of the loan via a co-signer, then the
co-signer is responsible. As well, because student loans are unsecured, a
lender may have no choice but to go unpaid. As far as what debts are forgiven at death, other
lenders may dissolve loans immediately following notification that the person
has passed away.
Common Issues That Are Completely Avoidable
There are many things that can go awry when trying to settle
a loved one’s outstanding debts, even if they obtained estate planning
services. However, none of these is impossible to rectify.
Pay Old Debts First
Before accepting any money, beneficiaries must pay any old
or outstanding debts left by their loved one. In some cases, a beneficiary can
be faced with some unwelcome surprises in the form of hidden debts.
In New York State, it is assumed that creditors will do
their due diligence to collect money owed, so it is not mandatory to post a
notice to creditors in your local newspaper. The statute of limitations on debt after death states
that creditors have six years from the date an executor was appointed to make
their claim.1 Creditors who don’t do so have their claims rendered
Never Speak to Creditors
Another common issue has to do with speaking to creditors or
collection agencies. Among the tactics they will use to try to recover their
money, members of these organizations will resort to feigned empathy and a
friendly and conversational tone to try to coerce repayment.
However, you are not obligated to speak to any creditor
regarding your loved one’s debts. The best thing to do is to never make any
commitment for payment and to end the conversation as quickly as possible.
Taking Personal Responsibility for a Loved One’s Debt
beneficiaries responsible for a deceased person’s debt?” is a very
common question. Unfortunately, some have ended up paying for their loved one’s
debt from their own pocket after having a conversation with a creditor.
Although creditors are legally permitted to contact the
relatives of a loved one to get the contact information for the person
responsible for paying their debts, they are not legally permitted to try to
coerce you into paying the debt yourself. None of your loved one’s
beneficiaries is responsible for the personal payment of their outstanding
The above is true even if your loved one’s estate is
insolvent or contains more debt than assets. If this is the case, you may not
receive an inheritance, but you won’t be responsible for debt repayment,
Any money that is in the estate will be used to pay for
funeral expenses, secured loans, preferential debts (social insurance and tax
contributions) and credit cards or personal loans, in that order.
Deceased Relative Debts Can Be a Complicated Process
Even if you do your homework and your loved one left
detailed instructions, you can still encounter unexpected problems with
settling their debts. The worst thing about going through this process is that
you are already feeling emotionally vulnerable and overwhelmed by what needs to
be done, and creditors are perfectly willing to take full advantage of this.
You also need to ensure that your loved one’s wishes are
followed exactly as they requested, as this can also lead to liability on your
part. Having an estate lawyer on your side, you can communicate
to creditors that, despite your grief, you will not be taken advantage of. You
can also ensure that your attempts to execute their wishes are well within
However, you need to ensure that the person chosen to
represent you is well-versed in New York State probate law. When it comes to
your loved one, there is simply no replacement for an attorney who has the
right amount of knowledge and experience in probate law.
The lawyers at Joseph A. Ledwidge, PC have 32 collective
years of experience in probate and estate administration law. No matter the
legal issue surrounding your loved one’s estate, we are well-prepared to
represent your interests. At our firm, your result matters. Discover the
benefits of working with attorneys who understand your cost and time concerns
as you deal with your loss. Contact us today to arrange your consultation.
In the period of time following the passing of a loved one, it can be difficult to know exactly how to proceed. This is especially true of following probate procedure and administering an estate, which can be a complex and lengthy task if there the decedent held many assets or claims are disputed.
Administering the estate in the correct manner is essential to ensure the wishes of the will are met, state and federal trust and estate laws are followed, and everyone receives their fair share of an inheritance. In this guide, we’ll talk you through the basic steps of probate and estate execution.
Appointing an Executor
The executor is the person tasked with dealing with the bulk of the estate administration. They will identify and catalog the deceased’s assets, pay off outstanding debts, finalize tax payments, and ensure distribution is in accordance with the will.
Choosing an executor is almost always the first step once the probate process has begun. If one has not been explicitly named in the will, then they will be chosen by the court. In most cases, the court-appointed executor will be the surviving spouse or closest relative.
The Next Steps
Once an executor has been appointed, it will be their duty to carry out the following steps. As probate law varies from state to state, the order and timing may vary slightly. In general, however, administration is carried out in the following order:
• Location of Assets – All assets, including real estate, money, stocks, and possessions must be recovered and inventoried. Note that some assets won’t go through probate, such as properties held in living trusts, joint bank accounts, life insurance payouts, and retirement funds with beneficiaries.
• Assessment of Value – The executor must then determine, usually through a third party, how much each asset was worth at the time of death. Many states require that this final inventory of assets be submitted to the court, along with how the values were reached.
• Notification of Creditors – All creditors of the decedent must be identified and notified to determine final debts owing. An advertisement in the newspaper is usually placed to alert creditors who would be otherwise unknown to the executor.
• Settlement of Debts and Taxes – All debts are paid off with the assets of the estate, liquidating physical property as necessary. Estate taxes will also be paid if required by the state.
• Finalization of Tax Returns – The executor will file a final tax return for the deceased, for their personal income during that year.
• Distribution of Estate – Finally, any remaining assets will be distributed to beneficiaries according to the will. Any assets left to minors may need to be placed in trust, which the executor will also have to oversee.
While attempts have been made to streamline estate administration—the most notable being the Uniform Probate Code—this process is not always as straightforward as it may seem. Difficulties can arise if:
• The will is contested
• The deceased is intestate (i.e., does not leave behind a will)
• Debts cannot be fully repaid
• The assets are especially complex or located in other states
Comprehensive estate planning is crucial to avoid these costly, time-consuming, and often emotionally taxing complications. Without the right estate attorney, there’s no guarantee that an estate will be handled the way it was intended to be.
Is your estate in the right hands? If you want to be sure, or if you have any questions about administering a loved one’s estate, you need an attorney who will put your needs first. Contact Joseph A. Ledwidge PC at (718) 276-6656 for a free phone consultation.
The emotional turmoil of losing a loved one can make it difficult to focus on finalizing their affairs in the days and weeks that follow. Having a list can make it far easier to complete these probate administration tasks yourself, or divide them among other family members and close friends.
Before Their Passing
As a relative or close friend, you need to know about their wishes. You should have important information such as funeral, burial, or cremation arrangements, as well as their preferences for organ donation and resuscitation. Knowing whether or not they have appointed a proxy or an advocate in the event that they’re unable to make medical decisions is also vital.
They should inform you about where all of their important documents and items are located. Life insurance policies; their will; keys to any safe deposit boxes; financial statements; and birth, marriage, or divorce certificates are all important items you’ll need to be able to find after they’ve passed away. Finally, they should have drawn up a will and given you a copy.
Immediately Following Their Passing
You will have to get an official pronouncement of your loved one’s death. If they died in the hospital, their doctor can accomplish this. If they died at home and were receiving hospice care, their nurse will be the one to call. If they died at home without hospice care, call 911 and be sure to have their DNR resuscitation document ready.
A Few Days After Their Passing
You’ll need to arrange for your loved one’s funeral and burial or cremation within a few days of their death. Review these estate planning documents and see if they prepaid for their funeral, burial, or cremation. If they were a military member or with a religious or another group, contact them to inquire about funeral services or burial benefits.
The Next Week to 10 Days After Their Passing
You’ll be gathering important documents from various locations in the next week or so. The funeral home can provide you with copies of their death certificate, which you’ll be sending to their insurance company, bank, and government agencies.
You’ll also need to bring your loved one’s will to their county or city office for probate acceptance. Their utility company, pension agency, social security, accountant, bank, and life insurance agent will also need to be contacted.
Talk to an Attorney
Even if you’ve completed all of the necessary steps correctly, the reality is that you can be held liable for not following your loved one’s wishes exactly as stated. Or, you may feel too overwhelmed by your loss to complete all of these necessary tasks yourself. Whatever your particular situation, an estate administration attorney can help you figure out what needs to be done.
The lawyers at Joseph A. Ledwidge, PC are strongly focused on probate and estate administration law. With a combined 32 years of experience, we can help you navigate the probate process. Your result matters to us; call (718) 276-6656 to arrange your consultation.
Holding a joint account can
make a lot of financial sense in certain situations. Although joint bank
accounts carry with them some potential for misuse, the convenience and benefits they offer generally far outweigh
In recent times, they’ve also
been promoted as an attractive way to minimize probate proceedings after the
death of one of the joint account owners—but are they as useful as they’re made
out to be? What’s payable
on death? Are there any complications which could affect what happens to
As with any matters involving New York probate law, an overabundance of caution is always advisable. In
this article, we’ll explain the common uses for joint accounts, what will
happen to them upon death, and what ramifications they have on probate
What Are Joint Accounts?
At its simplest, a joint
account is a bank account held by two people, who then have the same rights of
access to the funds. Permission isn’t required by the other party to make
transfers out of the account, regardless of who deposited the money there in
the first place.
This type of account can be
useful in a number of scenarios:
As a secondary
account that children or other relatives can draw on
As proof of a de
facto (common law) relationship for immigration or visa purposes
For sharing of
funds between you and your spouse
To help manage the
financial obligations of an elderly or infirm relative
To provide easy
access to funds if one account holder becomes incapacitated
Convenience Versus Right of Survivorship
The most important distinction
to note between types of joints accounts is whether it’s a “convenience”
account or an account with “right of survivorship.” This is generally
determined when the account is first created, and the vast majority of accounts
fall into the latter category.
Sometimes this is indicated by
the acronym WROS (With Right Of Survivorship) or JTWROS (Joint Tenants With
Right Of Survivorship) in the account title. If it isn’t, you’ll need to ask
your bank to find out what type your joint account is.
Who Will Inherit the Account
When a joint account holder
becomes incapacitated or unable to withdraw funds for any reason, the other
account holder can typically use the bank account just as they did before. The
same is true if the joint owner dies, but only if the account is one with
“right of survivorship.”
In this case, the joint
account is not subject to probate proceedings and is not considered part of the
deceased’s estate. Since it’s not part of their estate and, therefore, no
longer their property, then it also means that it can’t be bequeathed or
otherwise transferred as part of the execution of a will. The sole owner can
also then close a joint bank
account after death.
On the other hand, if the bank
account is specifically marked as a “convenience” account, the other owner will
no longer have access to the funds when one owner dies. Instead, the entire
account and any contained funds will be treated as the deceased’s assets and,
thus, part of their estate, subject to the probate of the will.
Paying Off Debts
Outstanding debts are settled
as part of the distribution of the deceased’s estate. This means that if the
joint account passes on to the surviving owner, and it doesn’t become part of
the estate, then it can’t be used to pay off creditors. If it’s an account of
convenience, then the remaining funds will be added to the estate and,
therefore, will be liable to be used for debt settlement.
The one exception to this is
if both the deceased and the co-tenant of the joint account were also
co-signatories on a loan. In this case, the surviving owner of the joint
account will be held liable for any remainder of the debt that cannot be paid
off by the estate.
Assuming the joint account is
one with right of survivorship, as most are, then it will not attract a probate
tax. However, there are three other separate taxes that the account will have a
The estate tax is a federal tax on the entirety of the deceased’s
estate, also known as a gross estate. The gross estate includes both probate
assets (those handled by a will) and non-probate assets (those not controlled
by a will, such as jointly owned properties and life insurance payouts).
As a non-probate asset, joint bank accounts on death
are subject to estate taxes. There are estate taxes on both the federal and
state level, although the exact rate varies from state to state.
Inheritance tax differs from
estate tax in that it is a levy not on the entire estate, but on individual
property or assets passed on to inheritors.
While the estate tax is paid out of the deceased’s estate, the
inheritance tax is paid by each individual on their share of the inherited
In theory, this would also
apply to the person who gains sole possession of a joint account. In practice,
this tax is currently only applicable in six states: Nebraska, Iowa, Kentucky,
Pennsylvania, Maryland, and New Jersey. The tax rate also depends on the
proximity of the relationship of the inheritor to the deceased—a spouse, for
example, often pays no tax.
In most cases, income tax will
be negligible on a standard checking or savings account. However, if it’s a
joint investment account with high returns, you’ll need to be careful with how
you report any income generated.
The income generated before
the death of the joint account tenant must be reported in the same way that it
was in prior years. So, if both account holders reported 50% of the income each on their tax return, the
same would be done on the deceased’s final tax return.
As soon as the joint account
transfers to a single owner, however, that owner is then responsible for
reporting the entirety of the income on their own income tax return.
The execution of a will can be
a complicated, emotional affair, especially if not every document and asset has
been managed properly. That’s why it’s vital to find out what kind of joint
account you hold and to thoroughly
document your intentions for the account before anything happens.
All it takes is one missed
detail. Consider an example where a single family member is using a joint bank
account to pay their elderly parent’s bills. They may inadvertently end up with
all the money when something happens, causing friction with family members and
others who feel entitled to their fair share. In the worst case scenario, it
can result in lengthy and costly litigation brought about by the aggrieved
Leave a Legacy, Not Confusion
Don’t leave a valuable estate
open to interpretation. Hire a professional and meticulous estate planner that
can take full care of you and your family. With over 20 years of experience, Queens probate lawyer Joseph A. Ledwidge PC can help executors,
beneficiaries, estate holders, and trustees with a wide range of estate and
Across New York, we deliver clients
the outcomes they need at rates they can afford. Call (718) 276-6656 to find
out how we can help you, too.
When a loved one has passed on, you will inevitably need to begin the work of settling their estate, which will involve going through the probate process with a Queens probate lawyer. In order to ensure your loved one’s property is distributed properly, it’s necessary to understand the difference between probate vs. non-probate assets.
What Is Probate?
The probate process proves the validity of a will before a Surrogate’s Court in the county where the deceased was living. Once the court accepts the will, the assets contained in that will can be distributed. However, before this can happen, the relatives of the deceased need to be called to court and given the opportunity to contest the will with a New York probate attorney if they feel they were unfairly treated.
Probate assets are those which are owned only by the deceased. These assets include items that are in their name alone, such as bank accounts, titled or held property, and life insurance policies.
Probate assets also include any interest the deceased may have had in a company, whether it was a limited liability, corporation, or partnership. Personal property such as automobiles, jewelry, and furniture are also considered to be probate assets by New York probate law.
Non-probate assets are those which are not solely in the deceased’s name. These assets include retirement, brokerage, and life insurance accounts which list a name other than the deceased’s as the beneficiary. Any property that’s held in a trust qualifies as a non-probate asset, as does property held in its entirety by tenants or in a joint tenancy.
A major difference between probate and non-probate assets is that the deceased’s will does not control how non-probate assets are distributed. Where the deceased has named one or more specific beneficiaries for non-probate items, those items will be distributed directly to these named individuals. Non-probate items without a named beneficiary may default to the estate of the deceased so that those assets can be distributed according to terms laid out in their will.
Probate Can Be a Complex Process
Unfortunately, the New York probate process sometimes becomes a difficult and complex process to navigate when family members contest the will of a loved one, or the settlement of a loved one’s assets places a significant financial burden on the executor.
Even jointly owned accounts can be challenged, which can complicate matters even further, not to mention cause division within the family. This can all add more negativity to an already difficult situation.
With a strong focus on probate and estate administration law, the law offices of Joseph A. Ledwidge PC represent executors, fiduciaries, heirs, beneficiaries, and other interested parties. Possessing a combined 32 years of experience, our attorneys understand the value and importance of providing clients with attentive service and manageable fees.
Your result matters. If you need help navigating the New York probate process of a loved one, call (718) 276-6656 to be put in touch with an experienced Queens probate lawyer.
You might wonder how an executor gains the legal authority in New York to take direct charge of the finances and property of a person who has died. It is actually quite simple. The legal authority to start managing an estate comes when a probate court issues letters testamentary. Whether you are preparing to become an executor yourself or are just a beneficiary, it is important to know what part letters testamentary play in probate matters.
As Bankrate explains, after an individual has passed away, a probate court will determine the validity of the decedent’s last will and testament. Assuming that the decedent had named a person in the will to take on the duties of the executor, the court will authorize that person to act as the executor if the court rules that the will can go into effect. This authorization occurs when the court issues letters testamentary.
Letters testamentary allow a person to perform all the necessary duties of an executor. The executor is allowed to open a bank account in the estate’s name and gather the money of the estate into the account for the purposes of closing out the various matters of the estate. These can include paying off bills and taxes the decedent had still owed before passing away. Additionally, the executor is empowered to take inventory of the assets of the estate, file the final tax return for the estate, and distribute the assets of the estate.
In the event that someone dies without a will, a court will not authorize letters testamentary. Since the decedent did not make a will and did not name an executor for the estate, the decedent’s estate is deemed intestate. It will be up to the court to appoint someone to be the executor. To authorize the executor to carry out the duties of the position, the court will issue letters of administration.
Keep in mind that this article is written to educate New York residents on probate topics. Since issues with probate take many forms, this article should not be read as legal advice.
Your loved one passes away and you get a copy of the will. Right away, you can tell that something isn’t right. You don’t think this will should stand. You want to contest it and fight for your rights as an heir.
But can you do so? Do you actually have the proper legal grounds to go to court? Or do you just have to abide by the will, even when you do not think that it accurately portrays your loved one’s wishes? This is already an emotional time for you and your family, and now this legal confusion makes it that much more difficult to move forward.
1. Undue influence impacted your loved one’s decisions
In other words, their decisions were not really their own. The will does not reflect what they wanted, only what someone else influenced them to write down.
For example, perhaps you have an older copy of the will in which you received far more of the estate. Right before their passing, your parent changed the will to give more of the estate to a step-sibling, whom you never got along with but who lived closer to your parent. You think that they convinced them to make the change by manipulating them in the fragile time near the end of their life.
2. Your loved one drafted the will without testamentary capacity
This is often a problem for people with dementia and other mental disorders. They may no longer have the mental capacity to understand what the will means, what assets they control or even what papers they are signing.
This could be related to the manipulation discussed above. Perhaps your step-sibling waited until your parent no longer understood the legal process and then convinced them to move assets out of your name. They never wanted to do this and didn’t even understand that they did.
3. Your loved one only signed through fraud
The extreme end of the example noted above is when someone uses fraud to get an elderly person to take an action they don’t know they’re taking. They can do this by lying directly.
For instance, maybe your step-sibling altered the will and then brought it to your parent. They told them it was a simple medical form they needed to sign for the hospital. They did it, trusting that person. However, they got tricked into signing an altered will that they’d never seen.
It is not uncommon for a person in their 20s or 30s to think that a will or a trust is only something that people in their parents’ or even their grandparents’ generations need. The truth, however, is far from this. While most people die later in life, accidents can happen at any time and a person may become disabled at a young age and unable to take care of their obligations or affairs even if they are still alive. An estate plan is simply smart insurance in a way.
NerdWallet notes that as more millennials become parents, the need for them to engage in estate planning grows. A clearly identified plan including named guardians for what will happen to their children should they die is something every parent should have. This is not a decision to be taken lightly. Simply saying that a grandparent will raise a child is not enough. A plan should also identify financial support for the to-be guardian.
ThinkAdvisor encourages millennials to give consideration to what might happen if they were to be involved in a tragic accident. Who would be able to make medical decisions on their behalf if they could not do it for themselves? This is another thing that can be identified in a good estate plan.
Documenting online identity and login information should also be done so that the appropriate person or persons would have access to these accounts in the event of a death. Beneficiaries for work-sponsored 401K plans and life insurance policies should also be updated and reviewed regularly.
When it comes to setting up an estate plan, health issues may play a role in various ways. For example, someone may be prompted to set up an estate plan specifically because of health challenges they are going through, which have made them realize that it is important to be prepared for unexpected problems that may be life-threatening. Moreover, other people may want to prepare for health issues that leave them unable to take care of themselves.
There are a number of options for those who want to ensure that they are cared for in the event they become incapacitated, and many people have benefit from setting up a health care proxy, also known as a durable power of attorney for healthcare. By doing so, you can appoint someone who you trust to make key medical decisions for you in the event that you are no longer able to make these decisions yourself. There may be other ways you can prepare for these potential challenges as well, such as making revisions to your will.
Ultimately, health issues can be incredibly overwhelming and disruptive, so it is imperative to be prepared. When it comes to estate planning, you should not only be taking into consideration your finances and those you love, but other important aspects of your life as well, such as your health. By preparing yourself for issues that could arise in the future, you may be able to rest easier at night knowing that you are ready for unexpected problems.
The possibility of a nasty court battle over a last will and testament motivates some people to stick a “no contest” clause into their wills. If anyone is going to step forward to contest the will, the no contest clause will specify that the contesting individual will be cut out of the will’s provisions. While this seems like a good way to dissuade beneficiaries from going to court over a will, New York law might not uphold such clauses in all cases.
No contest clauses might seem unfair at first glance since they present an all or nothing proposition, and if a person finds fault with the will, that person could lose out completely on the benefits of the will by contesting it. FindLaw states that for these reasons, many states will not enforce such clauses and will allow people with standing to contest wills if valid reasons exist to do so.
New York law, however, is quite specific, stating that no contest clauses are valid in the state. A testor does not need to provide a beneficiary with any alternative benefits if the beneficiary contests the will. Also, it does not matter if a beneficiary has a probable cause to contest the will. The no contest clause can still take effect and disinherit the person for contesting. However, this is not true for all cases.
State law does provide specific exceptions that bar a person from being disinherited. For instance, the contesting individual may only be claiming that the will is not being offered in the correct jurisdiction and is not challenging the provisions of the will. A challenger may also not be competent under the law to make the challenge in the first place and thus cannot be held responsible. State law provides this exception to infants as well.
People may also suspect that there is something wrong with the will itself, perhaps believing that the will is not even legitimate. State law permits residents to challenge wills if they are forgeries. A will might also have been superseded by a later will but the earlier will was wrongly put into effect, which can also form the basis for a legitimate challenge.
Additionally, a no contest clause cannot be used to coerce people to not engage in legitimate probate actions. A beneficiary may have documents or information that are relevant to a probate proceeding but the testor of the will might not want to come to light. Regardless of the testor’s wishes, a person cannot be disinherited for bringing these documents forward. A person also cannot be disinherited for not participating in a petition to put a document through probate as a last will.