What should the executor do with a BROKE estate? NY
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What should the executor do with a BROKE estate? NY
My family member is the executor for a lady no relation who died with 700 and
nothing of value. When the will was made, she was a millionaire but she needed
24/7 care for 15 years and went broke. Medicaid has been paying for the home care
and she got food stamps. SS barely covered utilities and taxes.
The house has a reverse mortgage with unpaid property taxes and I guess it’s
going to be given to the lender soon.
He already paid 3k out of his pocket for the funeral. The lawyer who drafted the will
is dead.
What should he do next? I’m worried he’s going to be guilted into paying for stuff or
something else to jam himself up. He’s already on a fixed income and he’s not
knowledgeable about this stuff. The situation in the beginning is way different than
the end.
I tried to research it but I only find info about not enough money but nothing about
NO money.
Asked on March 25, 2017 under Estate Planning, New York
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
What you have here is an INSOLVENT estate - meaning that there are not enough funds in order to pay off bills. Your friend still has to file a Probate Proceeding to give creditors the opportunity to make claims on the estate, even though there is nothing there. There ar certain priorities given even when funds are low:
Generally, the priority of paying probate claims in New York is as follows:
Funeral and burial expenses
Administration expenses and attorneys’ fees
Estate and personal taxes owed by the decedent
Medical bills relating to the decedent’s death or any illnesses resulting to the decedent’s death
Judgments
Secured debts such as mortgages or car loans
Unsecured debts such as credit card bills
Your frined should make a claim in the estate for the funeral expenses. He will get that money back. The clerks of the Surrogate's Court are the nicest people and will often help him, although they can not give him legal advice. Good luck.
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