Creditors seeking Probate on Aunt's Estate

[beto]

I am receiving letters from creditors stating that the estate of my aunt has to pay her debt. I am not an executor of her estate. She did not have any money in the bank or assets. She was on disablity and lived off of her retirement and social security.

When my aunt died I (nephew) was the beneficiary on some insurances and 1 pension.

2 life insurances = 75,000

1 retirement fund in which my aunt placed 28,000 of her own money(payroll deduction). With interest and matching payment from her company, the payout was about 80,000. This is going to be taxed by a 20 % capital gains tax.

Here is my question? Can her creditors get any of the above funds?

[lwpat]

Insurance and pensions usually pass outside of probate and are not a part of the estate. Unless the funds are a part of the estate, the creditors cannot touch them. Send them a copy of the death certificate and state you are not the personal representative.

[beto]

You stated that usually insurances and pensions are not subject to probate. When are the funds part of the estate? When she was alive I had power of attorney, does this mean in death I am not her personal representative.

[aaron]

Did the pension have a named beneficiary?

[beto]

Yes, I was the named beneficiary.

[Mr. Knowitall]

If the money passed by virtue of your being a named beneficiary on the pension, retirement account, or insurance proceeds, the money did not pass through the estate. If there was no beneficiary, or there were funds or accounts exclusively in your aunt's name, or if she owned a home in her name or had personal property, those assets may be subject to the creditors' collection efforts.

[lwpat]

A POA is only for the living. After death you cannot use a POA to transfer funds out of the estate. The probate court names the personal representative once someone files to start the process.