Legal Question in Wills and Trusts in Illinois

Ill relative needs help

My sister isterminally ill and does not expects to die soon. She lives with my parents due to her divorce. She owns no real estate or property and has no children. She owns a car (paid for/worth around 5k), some personal belongings and has around 2k in her checking account. She also has life insurance and a (401k) for around 1k. She is employed but on sick leave. I will see to her financial matters. I downloaded (legaldocs.com) the durable power of attorney for financial issues form and plan to be her DPOA. My dad has agreed to be her DPOA for Health Care. We drafted a Will that names me as the executor and my dad as the sole beneficiary of her estate. She owes about 5k in revolving credit. My questions are..

Are my folks or I personally responsible for her debt, or is her estate?

Do I need to register the durable power of attorney (financial/health) similar to the will and with whom?

Will her creditors try to liquidate her personal belongings (auto, furniture, clothing, and jewelry)?

Will this even go to probate due to the small estate value and sole beneficiary?

Will her retirement fund (401k) go to her estate or to a beneficiary?

Is the beneficiary of her life insurance liable for any debt?

Thanks


Asked on 10/17/00, 8:13 pm

1 Answer from Attorneys
Lawrence A. Stein Aronberg Goldgehn Davis & Garmisa, LLC

Re: Ill relative needs help

Your parents are not liable for your sister's debts, unless they agreed to pay them. Your sister's estate is liable for the debt, if the creditors properly make a claim. A competent attorney can file the appropriate papers to bar all claims not properly made. You may have to show the powers of attorneys to those with whom you are dealing for your sister. Any creditor who properly makes a claim can require your sister's belongings to be liquidated, if they want, though there may be ways to prevent that under cetain circumstances. If a beneficiary is properly named on the 401(k) and the life insurance, the proceeds of each of them will pass to the beneficiary, bypassing your sister's creditors. Whether to probate your sister's estate is a question you will answer in the first instance as executor. There are benefits to probate, such as sppeding up the process of barring the claims of creditors who do not properly present their claims. The beneficiaries of the life insurance and the 401(k) are not liable for your sister's debt.

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Answered on 11/15/00, 9:31 am


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