QUESTION
Debt after mother's death (Virginia)
Asked on Mar 15th, 2017 on Trusts and Estates - Virginia
More details to this question:
My mother was recently diagnosed with stage IV ovarian cancer and is not expected to make it much longer. She is widowed. She has a home and probably owes as much as it's worth. She has a 401k retirement account that has her three daughters as beneficiaries. Regarding her medical bills, who is responsible after her death? As expected with chemo treatments, the bills are adding up. She pays a small amount towards them each month as she is on disability. After being sold, I don't see her home bringing in much money for her estate. In the state of Virginia, will they are take her retirement account to pay towards medical bills or is that safe from being taken and split between her children? Hopefully, I've given you enough information. Thanks in advance for your help.
1 ANSWER
Maryellen Sullivan
Her debts are her own now, and will become debts of her estate once she has passed. So, only her estate assets must be used to pay her debts after she dies, and there is usually a small amount of assets that are allowed to be exempt from creditor's claims by the family. (In Maine, it is $7,000 if there are no dependents or surviving spouse). The law also prioritizes creditors: funeral homes usually get paid first, lawyers and costs of probate, taxes and secured creditors all have priority over medical bills.
Retirement benefits that your mother receives now are her assets and are subject to her creditors. If she named you and your sisters as beneficiaries, those benefits will be paid direclty to the three of you once she dies and should not be considered estate assets.
Answered on Mar 15th, 2017 at 7:58 AM