I have an estate question regarding the obligation to pay bills left by the deceased love one:Here's the situation: My mother was the chosen...

Question

I have an estate question regarding the obligation to pay bills left by the deceased love one:

Here's the situation: My mother was the chosen executor of my great grandmother's estate, for which she established a separate estate bank account once she sold my great grandmother's house. According to my great grandmother's will, my mother (the executor) was instructed to disburse equal shares of the money left in the estate account to the heirs after all my great grandmother's expenses/bills were paid off.

However, my mother just recently passed in July of this year before she could finish carrying out the disbursements to the heirs. My mother was very sick for a long time and may have accumulated a few unpaid medical bills of her own. She did not have a will in place before she died. Her only estate was her personal belongings, which have already been claimed by immediate family members, an old car she owned, and an open (but now frozen) checking account with less than $2,000 in it.

I need to know,

(1) If I go to court and fill out forms to become an administrator over my mom's affairs, do I have to open an "estate" in my mom's name in order to close my mom's bank account and get the money out to split with my sister, or could I do that without officially opening up an estate in my mom's name?

(2) If I can close her account without opening up an estate in her name, could my sister and/or I still be held personally liable for not paying off my mom's left over medical bills first with that money before closing the checking account and claiming that money for ourselves?

(3) Finally, If I am awarded by the court full legal administrator rights over my deceased mom's affairs, would I have a fiduciary responsibility to pay off my mom's bills with my great grandmother's estate money before disbursing it to her heirs as stated in her will, or does my mom's left over bills have nothing to do with my great grandmother's estate?

Thank you.

Answer

You need to retain a lawyer before you get yourself in a mess (and you could get into one on these facts).

First of all, someone needs to apply to complete the probate of your greatgrandmother's estate. To the extent those assets belong to your mother, they will get probated twice.

Second, while there are possible shortcuts with small estates, if you take money before paying creditors, you can get sued. If her assets are exceeded by her debts, you may do better to never probate anything than to do a probate that will only partially pay creditors. Discuss this with your lawyer.

My office does handle these type situations. I'd want details on both estates to be able to advise on the best options. Don;t dispose of any assets until you see counsel.

Answer

You have 2 estates that need handled - your great-grandmother's and your mothers.

Did your great-grandmother have a will? If so, then read the will to see who is named as a backup executor if your mother resigned or passed away. If there is no will or if no one is named, then someone needs to do it and you should apply. Any monies belonging to your great-mother's estate should be in an estate account not in a personal account in the name of your mother. Your great grandmother's funds do not go to pay your mother's bills. You first need to see who the beneficiaries are of your great-grandmother's will or via the intestacy law of the state where your great-grandmother resided at the time of her death.

Assuming that your mother is a beneficiary of your great-grandmother's estate, then you will need to become the administrator of your mother's estate, open a bank account in the name of your mother's estate and deposit any funds that would be owed to your mother from your great-grandmother's estate into the bank account for your mother's estate. The rest of the money from your great-grandmother's estate goes to the beneficiaries named in your great-grandmother's will or to her heirs via the intestacy law.

Since your mother has some assets, know that the heirs cannot keep money or other possessions and NOT pay the creditors. Creditors are paid in order of priority before anything goes to the heirs. While you are not personally liable for your mother's medical debts, you may have to pay money into your mother's estate if you start distributing things without properly probating her estate.

I know what you listed as assets, but you are going to have to go through some form of probate in order to close your mother's bank account. If the estate is very small, you may be able to use a more simplified procedure, although there are advantages to going through more complex probate. Chief among the advantages is that you advertise notice of your mother's death and if the creditors do not step forward and file any claims, then they are barred. You will need to discuss the pros and cons of probating your mother's estate versus the more simplified procedure with an attorney.

You will need to consult a probate attorney in the county/state where your great-grandmother and mother resided at the time of their respective deaths. If this is in different states, then you will need 2 attorneys as state probate/intestacy laws differ. If they both resided in Georgia, then any attorney will be able to help with both estates, although it would be helpful to get an attorney from the same county as one of the estates as he/she will be most familar with local practices and rules.