Creditors are placing a claim against Dad's estate, what should we do?

1 answer | Last updated: Oct 01, 2016
Really1 asked...

Hy sister is power of attorney. My father had insurance more then enough to cover funeral cost and bills. He had an legal will that left my siblings an myself autos. Why are we being made to pay the estate for them? She was suppose to pay the bills with the balance of insurance money. Now creditors are placing a claim against the estate. What should we do. Help hopeless in Maryland

Expert Answers

Barbara Repa, a senior editor, is an attorney, a journalist specializing in aging issues, and the author of Your Rights in the Workplace (Nolo), now in its 10th edition.

First, any rights or duties your sister had as your father's agent in his power of attorney ended when he died.

It is the executor named in his will who is responsible for gathering up the property your father owned at death and then distributing it to the beneficiaries named in his will. If your sister was named executor, then it is her job.

Looking at what happens to debts and property after a person dies may help explain what is happening. It's not unusual for creditors to place claims against an estate. When a person dies, the executor usually files the will with the local probate court and then must place a legal notice in the local paper that is meant to notify all creditors that they may be able to come forward and ask to have debts repaid. The debts are then paid off in a hierarchy set out by state law"”and the property that remains is distributed to the beneficiaries who were named to take it.

Sometimes, property that a person owned at death needs to be sold off to cover the debts he or she owed at death. And beneficiaries who get property that has a debt attached to it, such as a car loan or a house mortgage, also become responsible for paying that loan or mortgage.

However, if you are being asked to pay something other than the loans that may still be on the cars, that sounds unusual. The will's executor"”your sister?"”will also be responsible for filing an accounting of the property, which will include a list of the property and the debts in the estate. This accounting will likely provide the answers you seek"”or at least show what debts needed to be satisfied with the property, or whether your sister is truly mismanaging things.

Ask to see a copy of this accounting. If your sister refuses to show it to you, you may need to take additional action.

In some locales, the accountings are part of the public record, so you are free to see a copy. In some places, beneficiaries are entitled to see the accounting by law; ask the local probate court for the rules there. And finally, you may be able to get a judge to require your sister to show you and the others an accounting; again, you can find out the procedure for this by asking representatives at the local probate court. Many of them even have self-help centers staffed with people who will help you fill out and file any required legal paperwork.