Legal Question in Credit and Debt Law in Missouri
What to do about my mom's bills
My mom, age 59, has been diagnosed with terminal cancer & can�t work. She has NO short-term disability, but WILL have long-term disability after 90 days (if she makes it) at 60% of her pay (we�re at day 22.) She has no assets & lives paycheck to paycheck & the last paycheck arrived. She lives with her mom who is paying day-to-day bills, but I don�t know what to do with her other bills: a car payment, car insurance payment, line of credit at bank & $3,000 to the IRS. These are auto-deducted from her checking. I am concerned about the car payment, as the doctors have said she will not drive again. She owes $1,800 more than the car is worth. Can I give the car to the bank? I want to use the little income that may start in 90 days for medical deductibles, prescriptions & pay for her health insurance, which her employer is allowing. I have a small savings & my 401K, but am fearful of ending in a financial mess paying her bills. She has a life insurance policy through her employer. Will I need to use that to pay bills after her passing & can creditors have access to that money? I have power of attorney. She is in a skilled nursing facility, but probably will go home & use hospice soon.
1 Answer from Attorneys
Re: What to do about my mom's bills
Your mother likely needs a guardian and conservator to manage her assets and her decisions if she is not capable of making them. If a court appoints you to do this task you become responsible for managing your mother's assets, but do not become personally liable on the debt unless you act against your mother's best interests (for example, if you sell a car worth $1000 to yourself for $100).
You should approach counsel in your area about getting guardianship and conversatorship. Once that process is in place, you can make decisions for your mother.
You can ask the bank to reclaim the car. The bank will sell it and whatever is left over (the deficiency amount) will become a debt in your mother's estate.
Life insurance policies pass outside of probate (unless they pay the estate, which is rare). If the policy pays you on your mother's death, then that money is not money of the estate and does not have to go for final expenses. Creditors cannot access that money.
Whatever her assets are (her car and her personal property, and a house if she owns one) would be sold on her death and whatever is left will be used to pay the bills. A person's heirs do not become liable for a decedent's debts. Her estate is liable. That estate pays the debts out of what is available, and distributes the excess to the heirs. If there is no money left after creditors, there is nothing to distribute.
You need competent probate counsel to assist you as soon as possible.
Good luck
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