Never thought I would have to post this -- death benefit question

[sjr1]

The completely unexpected has happened -- my father in law suffered a massive stroke on Tuesday and passed away early Saturday morning. This was a man in great health (normal weight, blood pressure, cholesterol) who was playing golf with his buddies the Saturday before.

We filed on May 23, so we are within the 180 day timeline. There is no will, so my husband and his sister will inherit his estate (he is divorced from wife). There is not a large amount of money -- $46K in an annuity plus about $100K of equity in his house ($73K for each).

I contacted our attorney but he just said to concentrate on family stuff now, and when we actually come into any inheritance to call him.

My question is this -- do they ALWAYS take the death benefit? This was obviously not a case of us filing b/c we knew he was going to die. We are so close to the 180 mark (Nov. 23) and it's not about the money for US but we have a 20 month old baby that we could put that money aside for.

Since there's no will can my husband release his claim on his dad's estate and have it go to our son instead, thereby protecting it?

I don't mean to sound greedy but my father in law would be really po'd if what little he did leave to his children went to DISCHARGED CREDITORS!~

[Flamingo]

I am sorry to hear of your loss and my condolences to you and your family. Since his untimely and unfortunate passing occurred during the 180 day timeframe of your filing, you are obligated to report any possible inheritance which your husband may receive, which you have done. Your attorney is correct and he cannot do anything further until you have a final calculation of what your husband will receive from his father's estate after all his bills are paid, funeral expenses paid and everything settled. Unfortunately your husband should have acted quicker on your question as to your husband releasing any claim on his father's estate - your husband should have had his father make up a will passing his share of his father's estate on to his grandson; but, no one expects the unthinkable to happen and something like this occur. Right now the state law falls into effect as to your father-in-law's estate and with his wife deceased, it will pass to his surviving children. Also, the house would have to be sold and other things done before there will be proceeds from that sale to split between your husband and his sister. After this is all over and bills paid (and depending on the value of the house and the equity/proceeds), there may not be as much there as you think. Keep your attorney informed when you get some actual figures in hand.

My father-in-law also passed away unexpectedly about 1 1/2 years into our Chapter 13 and we had to inform our attorney with his estate going to my husband and his brother as his wife was deceased. The Trustee only kept 1/2 of some small insurance proceeds after bills/expenses paid since those bills and funeral expenses took out a good chunk of the available funds. But you are Chapter 7 so keep your attorney informed and I wish you the best of luck as to the outcome.

[sjr1]

Thanks for your reply, Flamingo. You're right that after all bills and funeral expenses are paid, there won't be a whole lot left.

My husband and I didn't really take any of the exemptions allowed to us by the state of Maryland (didn't have anything to exempt). Will we be allowed to use those exemptions to protect some of my husband's inheritance?

[Flamingo]

I can't answer your question so maybe hopefully someone else on here can; if not, check directly with your attorney.

[keepmine]

Also, don't forget the depressed real estate market and the real estate commission will eat into any proceeds from the home sale.
Since their is no will and no estate tax due, I don't see how the trustee would ever find out. I'd be sorely tempted to just not report it.

[Flamingo]

Also, don't forget the depressed real estate market and the real estate commission will eat into any proceeds from the home sale.
Since their is no will and no estate tax due, I don't see how the trustee would ever find out. I'd be sorely tempted to just not report it.

Remember, the death and estate and also the beneficiaries of the estate will have to be reported and listed with the Register of Wills in the State in which the deceased resided. Also they will both be involved in the possible sale of the house with funds changing hands and SS numbers and other information being reported since they will both have to sign the paperwork for the house for anything done with it. All that information is readily available. While it's tempting not to ever report anything like this in a BK, you have to realize there is always risk involved no matter how much you want to try to run and hide. The OP did the right thing by contacting her attorney - she and her husband should discuss with their attorney what should or should not be reported to the Trustee in this situation.

[sjr1]

really??

is that how they track such things? Through the Register of Wills or Estate Taxes? If there's no will, won't his estate have to go through a probate court and wouldn't that leave a record trail?

[JRScott]

Yes Probate will leave a record trail, you did the right thing as Falmingo said in contacting your lawyer.

Once things settle maybe early next week contact them again and see what options are on the table. I know its hard to think of it this way, but its money you didn't realize that you would get anytime soon and if you do have to lose it your not really out anything. It's a shame he didn't have a will, course my own parents only rewrote their will 2 years ago finally including my brother who was born 15 months after me......(kinda sad they didn't update the will for 35 years...)

[sjr1]

Yes, I have been thinking of it as money we wouldn't have had anyway, but in a way that isn't right. It's money my husband thought he would have MANY years from now for a nest egg for our son.

The worst thing is -- the creditors will get paid (proabably in full) and we'll still have a BK on our record for 10 years.

[landofpoor]

ok for a spin say what would happen if a person hasnt filed yet and say a person passed on and you were to inherit enough money to come out of debt but that would be all or even say enough to pay part of it. and you decided not to file banktruptcy till the funds were gone then what?

[Tbornetun]

I wouldn't file until at least 2 years from the time that you received the inheritance.

[Tbornetun]

BTW in MN the trustee CAN go back 6 years according to our local rules if they choose to do so. Most don't unless if they have other reasons to suspect dishonesty or other undisclosed items from the SOFA.

[landofpoor]

so once you file its a 180 day forecast look on inheritance?so say after 7 months of a death the inheritance would be yours?unless of course you knew you were named in a will and there was a timline on the death such as cancer if I am posting this right kinda buggered up I know lol