Estate Law Questions? Ask an Estate Lawyer.
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In no event are you responsible for your mother's debt unless you cosigned or guaranteed the debt. Since the money was paid to her while she was alive and she then passed away, the money would typically be part of her estate. In that event, you would need to open a probate and allow creditors the opportunity to make valid claims to the money and be paid. After payment of valid claims, if any were made, then you could distribute the funds to the beneficiary or beneficiaries of her estate. However, in some cases, a person must survive a set number of days before being entitled to funds. It may be that the insurance company is now treating her as already deceased so they can pay the funds directly to the next beneficiary under the insurance policy. You would need to discuss this with the insurance company to determine whether they can pay it to you as beneficiary due to a clause in the policy that required her survival after your father for a set number of days. If there is no such provision, then you need to ask them their basis for paying the check to you versus to her estate (in the latter case you would proceed as discussed above -- and that would be typical; if you take the money and it should have gone to her estate, then the creditors could later make claims against you for not properly administering her estate before taking the funds; that it is why it's so important to discover the insurance company's basis for saying they can now write the check to you). If you came into my office, I would tell you the exact same thing and offer to call the company for you to determine more information. Unfortunately, I cannot provide that type of service to you, so you'll have to make those calls yourself.
Please let me know if I can provide clarification or additional information. Thanks.