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I am sorry to read about your mother's passing. My condolences. My mother recently passed away and my father got a letter from a collection agency (the debt was not in arrears) stating some credit card debt that she had solely in her name needed to be paid from her estate ("Please remember that only the Estate is liable for repayment of this debt"). The letter also stated that my father was not personally responsible for the debt ("Payments from survivors or next of kin will be accepted only on a voluntary basis"). My father got a small amount of insurance money (not enough to cover the card balance) and that has been used up through the costs of her cremation. We live in California if it makes a difference. My questions are: 1. What constitutes an estate as it relates to this issue? Response 1: Any asset that belongs to your mother that is subject to probate. That is, all probate assets. Any property she owed as Joint Tenants with Right of Survivorship would not be part of her estate as those assets become the assets of the survivors upon her passing. Same thing goes for her bank account and any account she set up as POD (Pay On Debt). Those assets would not be part of her estate. Those assets are non-probate assets.
Life insurance is a third party contract. The proceeds go to the beneficiary after the passing of the insured and would not be subject to the claims of the insured’s creditors because at the passing of the insured, the proceeds belong to the beneficiaries.
The collector is on a fishing expedition and is trying to intimidate your father into paying the debt. Your father has NO LEGAL obligation to pay the debt if there is no asset in your mother's estate. Also and more importantly, no one should be making voluntary payment on the account. Furthermore, if the account was established before the marriage or if your mother used the card for her sole benefits, the credit card debt is not a community property debt and your father is not responsible for it.
2. Does my father responsible to pay this debt off? Response 2: No.
Thank you for your reply. It was very helpful and not the answer I was expecting. So just for clarification, he has already informed the bank of her passing, does he need to inform the bank that the card was issued from that he will not voluntarily pay off her debt or does he just stop making payments.
Thank you for your reply. It was very helpful and not the answer I was expecting. So just for clarification, he has already informed the bank of her passing, does he need to inform the bank that the card was issued from that he will not voluntarily pay off her debt or does he just stop making payments. Response: He should stop making payments. If he set up automatic debits, he needs to close the account associated with the debits. Informing the bank would not stop the debits. The bank would blame the continuing debits on "computer error."
A quick correction on my previous response. POD stands for Pay On Death and not Pay on Debt. My typo.