What happens when one of the heirs has no money to settle the estate?
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What happens when one of the heirs has no money to settle the estate?
My mother passed away in December. My sister and I both received $35,000 in life insurance and joint ownership of her house which is paid off. We were each told to set aside $5,000 each to settle her estate. It is now time to do so and we owe $10,000 in inheritance tax and credit cards. My sister doesn’t have a dollar to her name so I have to foot the whole bill. Does this mean that she forfeits ownership of the house? What are my options?
Asked on August 14, 2010 under Estate Planning, Pennsylvania
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
I am sorry for your loss. No, it does not mean that she forfeits the house, which I am sure is worth for than $5,000. What you can do depends on how you are proceeding through this matter with the house, etc. I would seek help from an attorney. Are you intending on selling the property? You could do so to pay the debt of $10,000 and not put in the $5,000 each. Or you could pay the whole amount and you could enter in to a separate agreement where your sister acknowledges the debt you have paid on her behalf and she agrees to give you $5,000 from her share in the sale of the house; you could enter in to a loan agreement; you could have her execute a note and file it as against the house once it has transferred ownership. It really all depends on "what comes next." Seek help. Good luck.
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