» Debt After Death

Claims Against Estates in Ohio

No matter how much money you have when you are alive, it is nearly impossible to die without some debt. The current month’s mortgage and utilities, car payments, credit card bills, and, of course, the expenses of your last illness, especially if you die in a hospital. But just because a person has a debt when they die does not mean that that debt survives them. In most cases, a creditor has to do something to keep that debt alive after the debtor has shuffled off this mortal coil. Here’s what you need to know about claims against estates in Ohio.

As a general rule, in order for a debt to remain valid after the person who incurred it dies, the creditor must present a claim on the debt to the personal representative of the estate within six months after the deceased person (decedent) died. The Ohio Revised Code specifies that “no payment shall be made...a… Read More

Protecting Your Home From Estate Recovery

Very few people are eager to go into a nursing home or assisted living. Yet, as we age, that level of care becomes a necessity for many people. If physical infirmity doesn't keep us from caring for ourselves, memory issues, such as Alzheimer's, may cause us to need long-term care. According to the United States Department of Health and Human Services (HHS), over 40 percent of people will need care in a nursing home at some point, either on a temporary or permanent basis.

As of 2015, the most recent year for which figures are currently available, the median cost of a private nursing home room in the Dayton, Ohio area exceeded $100,000 annually. This figure is unlikely to decrease in the future.

Given the likelihood of needing care and the expense of skilled nursing care, there is an overwhelming expense looming for many families. Some people who can afford it and qualify for it purchase long-term care insurance. Many people also consult an elder law or estate planning attorney about Medicaid planning, with an eye to reducing countable assets so that they can qualify, sooner, to have Medicaid cover the cost of a nursing home stay.

What many people do not co… Read More

What You Should Know About Creditor Claims in Probate

The probate process is, in essence, about distributing the deceased's assets to beneficiaries and heirs. But before that distribution can take place, creditors of the deceased are entitled to make claims against the estate and, if those claims are valid, have them paid out of estate funds. Here's what Ohio executors and heirs should know about creditor claims in probate.

How and When Are Claims Made?

Claims against the estate must be made (presented) within six months of the death of the deceased, regardless of whether a personal representative (an executor or administrator) has been appointed or whether the estate was not required to go through probate (known as summary release). Each claim must contain the claimant's address.

There are a few ways in which a claim can be presented under Ohio law:

  • To the personal representative in writing;
  • To the personal representative with a copy also being filed with the probate court;
  • Sent in writing by ordinary mail addressed to the deceased, and actually received by the personal represe… Read More

Reverse Mortgages and Probate

We've all seen them: the TV ads featuring actors from our favorite shows of past decades, now a bit grayer and more mature—just like us. We liked them then, and we like them now, as they impart more wisdom, this time about reverse mortgages and how they can relieve financial worries for older Americans. At some point, the camera pans to smiling senior citizens who are now able to enjoy their golden years unburdened by financial stress.

If this sounds too good to be true, it probably is. Let's talk about reverse mortgages, what they are, and how they can affect your family at your death (or sooner).

What is a Reverse Mortgage?

In essence, a reverse mortgage is a home equity loan. Unlike a typical home equity loan, in which you borrow a sum of money using your home as security and then pay it back over time, With a reverse mortgage, your home still secures the loan, but you receive a lump sum amount or possibly a line of credit. At your death, or the death of the last surviving borrower who uses the home as a principal residence, the reverse mortgage becomes due and payable. The amount due will be greater than the amount of disbursements, in order to co… Read More

Do Your Heirs Inherit Your Car Loan or Lease?

Years ago, people typically bought cars and drove them until they were no longer roadworthy (the cars, not the people). These days, it's much more common to replace your vehicle every few years, whether by purchasing or leasing a new vehicle.

An unintended consequence of this trend is that more and more people are passing away with vehicle debt. What happens to your vehicle, and the debt that's attached, when you die? Do your kids or spouse inherit your car loan or lease?

Dealing With a Car Lease After a Death

A vehicle lease is a contract, so if you're managing a deceased person's affairs, the first thing you should do with regard to a vehicle lease is to review its terms. Death may be deemed an "early termination" of the lease, and payment obligations may continue. If there is a co-signer on the lease, he or she may be liable for future payments; otherwise, they are likely to be the responsibility of the deceased's estate.

While reviewing rights and obligations under the lease, make sure that lease payments are kept up; failure to make payments can limit… Read More

Who is Responsible for Your Medical Debt When You Die?

Most people would wish to pass away at home in their sleep, after a long full life and without suffering. The reality, of course, is that many people die after long illnesses, often involving a hospital or nursing home stay. When that happens, who pays the medical bills that are left behind?

Most bills, such as credit card debt in the deceased person's (decedent's) sole name are the responsibility of the probate estate. If there are not enough assets in the estate to cover all debts, the creditors may have to take a loss.

However, medical bills, which are often considerable, are treated differently in Ohio, and a surviving spouse may be responsible.

Medical Debt and the Ohio "Necessaries Doctrine"

Responsibility for final medical debt is treated differently from state to state. Historically, most states observed a common law "necessaries doctrine" that made husbands liable to third parties who provided their wives with necessaries, including food, shelter, and health care. Ohio has codified this Read More

What Happens to Your Credit Card Debt When You Die?

You can't take your money with you when you die—but what happens to your credit card debt when you die? And if you are the heir of someone who has accumulated a lot of credit card debt, what is your responsibility for that debt if your loved one dies?

The answer depends in part upon whether the credit card was in the name of one person, or was a joint account. Many spouses have joint credit card accounts. If you and your spouse jointly signed for a credit card account, and one of you dies, the other continues to be liable for account debt, even if it was incurred by the spouse who died.

However, not everyone who uses a credit card is a joint signer on the account. It is possible that a credit card holder can make someone an authorized user on the account without making them a joint signer. It's important to know whether you are a cosigner or authorized user of the deceased's credit card.

How Credit Card Debt is Dealt with When a Cardholder Dies

Now you know that as long as you didn't co-sign for the credit card, you… Read More