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Nate, Attorney
Category: Estate Law
Satisfied Customers: 10686
Experience:  Over 10 years of legal estate experience.
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My sister recently passed away and does not have a will. Her

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My sister recently passed away and does not have a will. Her only assets appear to be her retirement account, a savings and check account and her life insurance through her employer. Assuming there is a named beneficiary for all of her assets, do funds from these account need to be used to pay off her credit card debt or medical bills? She is single and has no children. No family member co-signed for any debt. What is the rule for her car loan?
My name isXXXXX have been a licensed attorney for over ten years and will be assisting you today.

Assets that had beneficiaries do not pass through the estate. Therefore they cannot be touched by her creditors. Those monies are not obligated to pay any of her debts.

The car is an asset of the estate (depending of course if there is any equity in it). If there are no other assets there would be no real reason to probate the car with a loan on it unless there was value there. If there is not, there is no harm in simply letting the finance company repossess it.

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Customer: replied 4 years ago.

Regarding the car loan, my sister has approximately a balance due of $18,000. When we looked up the value of the car on Blue Book, it showed the value to be approximately $24,000 to $27,000. My sister also had some furniture, clothing and household goods of some minor value. I assume there is no need to probate these assets. She did not own a home or other assets. Regarding the car, I assume we let the finance company repossess the car or we pay off the balance and then sell the car. If we do the latter, are we required to put the car in probate for her creditors? We are trying to stay out of probate since there are very little, if no assets.

Whatever profit there is on the car would be subject to the other creditors.

For the most, creditors don't care about personal items unless there is some sort of collectible value (such as rare art) involved. The smaller personal items won't require a probate proceeding, and if some creditor makes a fuss, they can open the probate themselves if they so choose. Just keep a general inventory of everything in case it is called for in the future.