General Question

john65pennington's avatar

Is the Power of Attorney person responsible for outstanding debts?

Asked by john65pennington (29080 points ) July 23rd, 2011

I was my mothers legal Power of Attorney, before she died. I paid all her bills with her money. She left behind numerous unpaid bills.
Question: now that my mother has passed, am I still responsible for paying her outstanding debts, as her POA, or are these debts just written off and that ends it?

Observing members: 0 Composing members: 0

17 Answers

RealEyesRealizeRealLies's avatar

Her estate is responsible for her debt. If you are in charge of her estate, then it’s up to you to pay the debt. But the debtors cannot hold you responsible.

marinelife's avatar

Are you her executor too? Her executor is responsible for paying her bills out of her estate.

Meego's avatar

I haven’t the biggest experience on this part, thanks to my MIL. Anyhow, taking from what she has said to me before, you are responsible. If there is no money left in the estate technically as @RealEyesRealizeRealLies has said, they can’t get blood from a stone. So the only other option for them would be to accept a copy of the death certificate and leave it at that. I’m not sure you know this but as the POA it is your responsibility to find/notify all debtors of your mothers so they can all have equal opportunity to be paid. My MIL is a serious fraudster which she has legally been able to get away with so I have researched about POA a bit. Oh I think the excutor does do that stuff not the POA as @marinelife suggested.

john65pennington's avatar

Yes, I am also the executor of her will. Her house is for sale, so, based on these answers, I am going to have to payoff her outstanding bills from the sale of her home.

Correct?

Meego's avatar

@john65pennington Unless you do what my MIL did and lie about the money which I think is virtually immpossible for you John. MIL in my life stands for mother-in-lawless.

jca's avatar

I would ask a lawyer because I don’t think you would have to, but as I see there are contradictory answers, I think a lawyer would be beneficial.

marinelife's avatar

@jca Billa do not just go away after a death, They must come out of the person’s estate.

“When you die, your estate is responsible for paying off the balance. If the estate goes through probate, your administrator or executor will look at your assets and debts and, guided by law, determine in what order bills should be paid. Remaining assets will be distributed to heirs by following your will (if you have one), or state law (if you don’t).”

Source

jca's avatar

@marinelife: being a cynic as I am, I would say that @john65pennington should find some source for his information other than a company that represents the credit industry, as your source does. Just playing devil’s advocate, not arguing with you in any way :)

CaptainHarley's avatar

As agent for the deceased, and executor of her estate, you must use what remains of the estate to pay outstanding bills. You are not personally liable for them.

marinelife's avatar

@jca Do you prefer these sources?

“Usually the estate will be responsible for these bills if they filed a creditors claim with the executor within 4 months after the estate was opened. What constitutes a creditors claim can depend on the circumstances but usually they will have to receive notice of the death, and then file a creditors claim with the probate court.”

Attorney Answer given by JWN, Member, California and Arizona Bar Answer given by JWN, Member, California and Arizona Bar

“When a loved one dies, a lot of financial questions arise. In every case, your best bet is to consult a trusts and estates attorney. Still, a few rules of thumb can help you figure out your own responsibility. The basic rule is this: The estate of the deceased is liable for the debt, and no one else is——not even relatives. This includes medical bills, credit card debt and mortgages. If the debtor dies with no assets, the debts go unpaid.”

eHow.com

srmorgan's avatar

This is one of the circumstances where the personal attention of a lawyer will protect you and keep you from making any errors in the administration of the will and of the estate. This is especially important when there is real estate involved. Pay for an hour of an attorney’s time, the bill can be paid out of the estate.

Laws regarding administration of estates and whether you need to go through a formal probate process vary by state. You are not responsible personally for any debts incurred by your mother unless you actually co-signed a debt obligation like a car loan.

Important, if your mother had any credit cards that she held for a long time, say 15 years, there is a slight chance that there is credit insurance on the card. It might be buried in the small print, call the credit card issuer. The chances of this are slim but it is worth a phone call.

Lastly, please accept my condolences on the loss of your mother.

SRM

anartist's avatar

Not for PAYING them. For liquidating funds to pay them, if necessary.

Her estate beneficiaries [such a benefit], including a beneficiary holding Power of Attorney, however, may be liable.

Zaku's avatar

If the estate has more assets than debts, then the debts get paid.
If the estate has more debts than assets, then it goes bankrupt and you don’t have to pay from your own money.

srmorgan's avatar

@Zaku
There are certain debts that get paid before others. A mortgage must be satisfied before a house can be sold; an auto loan must be repaid before a car can be sold. The net proceeds after sale are part of the estate.

@john65pennington – Just because you held you mother’s POA when she was alive may not give you the discretionary power to liquidate her estate and act as her executor. That is determined by the terms of her will or by state law if she died without a will.

Some assets are not included in the decedent’s estate like life insurance proceeds or annuity contracts. I am an insurance agent and we frequently use this as selling points for our products. You should be aware that life insurance is paid directly to a beneficiary, so if you get a beneficiary’s payment, it is excluded from the estate

Speak to an attorney before you do anything and don’t depend on Fluther for specific legal advice about such an important matter.

intrepidium's avatar

I’m not sure if this was implicitly addressed above, but could the person with POA be held liable by a unpaid creditor who disputes the priority given to other creditors who were paid (or paid first)? In other words, could the POA holder be sued for a poor decision even if they are not liable for the payment settlement itself?

candicane's avatar

All bills must be paid out of the estate and the remainder goes to the family or persons named in the will, I just went through this with my sister. All credit cards and other debts must be paid including doctors and hospitals. You are unable to close checking and savings accounts for 40 days and the money must go into the estate unless you are also on the account. I had to pay $50,000 in debts before I could receive any money from the estate. Hope this might help.

Answer this question

Login

or

Join

to answer.

This question is in the General Section. Responses must be helpful and on-topic.

Your answer will be saved while you login or join.

Have a question? Ask Fluther!

What do you know more about?
or
Knowledge Networking @ Fluther