Pay Deceased Credit Card from Her Own Account
My question involves estate proceedings in the state of: California.
I was handling my late mom's accounts and bills in the final months
before her death. She has a pour-over will, and a now irrevocable trust.
The checking account is listed as an asset in her trust. I will be her
executor and trustee. I have access to all of her checking and credit card
accounts online. Not sure if it matters, but there are two beneficiaries of
the trust, and I am one of them. Both the checking and credit card accounts
are in my mother's name.
Can I just call the credit card company and have them take the money
they are owed out of mom's checking account? That's what I was doing
when she was still alive.
Or is this going to be way more complicated than that, since she is now
passed away.
A related question is that my nephew was helping me provide 24x7 home
care for a fee my mom offered to him in the final weeks of her life. A
few days after my mom passed, I did a bill-pay to him for his final payment
from my mom's account.
I later found, on this site, that doing so might have been a felony. The check
is still in processing, but too late to cancel. My nephew has agreed to tear it
up and I will make him whole with a check from my own account, which I plan
on accounting for as a loan to the trust. So the check from my mom's account
will never actually get cashed. Have I narrowly avoided committing a felony,
or should I still be worried about something? The amount was small; $300.
Re: Pay Deceased Credit Card from Her Own Account
What does the trust and other documents say? Is there a designated trustee (there should be)? I am very uncomfortable about saying "do this" for a legal document I have not read.
I went through this for my father. I was the designated trustee. All assets were very clearly put in the Trust's name and my father left clear instructions on his intentions. He took me to his bank while he was still alive, put my name on all accounts and on the safety deposit box. He formally introduced me to his bankers. I had a legal power of attorney if he became incapacitated. He also designated my sisters as his medical power of attorney. No surprises. All beneficiaries had copies of all paperwork prior to his death and he talked to everyone making it clear what he expected.
I was also a beneficiary (one of four). Once my father died, I did exactly what the Trust and other documents said my father wanted done. If there were any questions I emailed my siblings and we discussed it. No surprises.
I am not saying that is the only way it can be done, but the more loose threads, the greater the need to involve a lawyer. Especially if you are not the Trustee. Regarding creditors, yes paying them is a Trust obligation, but if there is insufficient trust assets to cover the debts, things get interesting legally. Putting one creditor ahead of everyone else could get legally interesting. The general rule is all debts first, all distributions last, but this assume that you are the Trustee and actually have legal authority to do these things.
Re: Pay Deceased Credit Card from Her Own Account
I am named as the executor and trustee in both instruments; will and trust.
Whether it matters or not, I was also her power of attorney.
The trust, on "Schedule A," is just a bland list of accounts and assets. No
specific instructions at all.
The listed checking account does have the funds to pay the CC debt. I know
the CC is due their payoff before beneficiaries get paid. My question is more a
transactional question; whether it would be legal and/or ethical to just "impersonate"
my mother (she gave me verbal authority and passwords while still alive) in order
to pay the CC debt from her checking account without first moving her cash to a trust
account by more formal means and paying the debt from there.
I'm just trying to simplify wrapping up her debts without transferring funds to a different
account, posting notices, waiting for claims to come back, and them paying them, just
to do what's eventually going to be done anyway. I want to do it more easily.
In my naive opinion, this should require no consent from other beneficiaries,
because their consent, whether given or not, would not change the liability
of the trust to pay her debts.
So I guess it just boils down to whether I can use my mom's original bank
accounts to conduct what would be routine trust business, acting as if I
were my mom, rather than acting formally as a trustee. Technically identity
theft? I don't know. Maybe? These are debts in her name that she would
have paid anyway if she were still alive.
I was actually "impersonating" her to pay her bills for the last few months of
her life. I guess I just don't know whether her passing changes whether I
should continue doing that.
Re: Pay Deceased Credit Card from Her Own Account
Quote:
Quoting
infoneed
I am named as the executor and trustee in both instruments; will and trust.
Whether it matters or not, I was also her power of attorney.
The trust, on "Schedule A," is just a bland list of accounts and assets. No
specific instructions at all.
The listed checking account does have the funds to pay the CC debt. I know
the CC is due their payoff before beneficiaries get paid. My question is more a
transactional question; whether it would be legal and/or ethical to just "impersonate"
my mother (she gave me verbal authority and passwords while still alive) in order
to pay the CC debt from her checking account without first moving her cash to a trust
account by more formal means and paying the debt from there.
I'm just trying to simplify wrapping up her debts without transferring funds to a different
account, posting notices, waiting for claims to come back, and them paying them, just
to do what's eventually going to be done anyway. I want to do it more easily.
In my naive opinion, this should require no consent from other beneficiaries,
because their consent, whether given or not, would not change the liability
of the trust to pay her debts.
So I guess it just boils down to whether I can use my mom's original bank
accounts to conduct what would be routine trust business, acting as if I
were my mom, rather than acting formally as a trustee. Technically identity
theft? I don't know. Maybe? These are debts in her name that she would
have paid anyway if she were still alive.
I was actually "impersonating" her to pay her bills for the last few months of
her life. I guess I just don't know whether her passing changes whether I
should continue doing that.
So, basically you were paying her bills online? Since you were her POA at the time, that was legit. However, the POA expired at the time that she passed. If your name is not on the bank account, then technically you should not use it. You should go the legal route and transfer the money to an account in the name of the trust.
However, if you paid your nephew through online banking, I would not recommend having him tear up that check. Just let that one go through as normal. Otherwise, it will be complicated as the check will still be outstanding as far as the bank is concerned.
Re: Pay Deceased Credit Card from Her Own Account
Quote:
Quoting
infoneed
The checking account is listed as an asset in her trust.
But is the checking account in the name of the trust? In other words, do the checks have just your mother's name on them or is the word "trust" up there above the address?
As trustee, you have the authority to pay her bills from the trust assets before distributing those assets.
Whether you can write checks on that account depends on the answer to my questions. If the account is not in the name of the trust then you need to study the trust documents carefully and determine what your powers are.
As for the $300 check, at this point, I agree with Ilworking, let it go through. It's probably of no consequence.
Re: Pay Deceased Credit Card from Her Own Account
Quote:
Quoting
adjusterjack
But is the checking account in the name of the trust?
No. It is just in her name. The trust bestows no special powers for the trustee to utilize that account; it is silent on the matter.
Thanks for your thoughts. I will do as suggested and move the money into a trust account.
I'll tell my nephew to cash the $300 check, and plead "stupid" to anyone who calls me out on it.
Re: Pay Deceased Credit Card from Her Own Account
Quote:
Quoting
infoneed
Can I just call the credit card company and have them take the money
they are owed out of mom's checking account?
You've given no reason to believe you lack the ability to make a phone call, and your post suggests the credit card company has the ability to do what you wrote. Whether it would be legally appropriate (which is what I assume you really intended to ask) isn't apparent from your post.
Quote:
Quoting
infoneed
A related question is that my nephew was helping me provide 24x7 home
care for a fee my mom offered to him in the final weeks of her life. A
few days after my mom passed, I did a bill-pay to him for his final payment
from my mom's account.
I later found, on this site, that doing so might have been a felony.
I can't imagine why that would be a crime at all, much less a felony. Care to provide a link to the thread where you obtained this information?
Quote:
Quoting
infoneed
Have I narrowly avoided committing a felony,
or should I still be worried about something?
No and no.
Except for retaining an attorney, acting on the suggestion of an anonymous stranger on an internet message board, who may or may not have the slightest clue what he/she is talking about is a very bad idea.
Quote:
Quoting
infoneed
In my naive opinion, this should require no consent from other beneficiaries,
because their consent, whether given or not, would not change the liability
of the trust to pay her debts.
Unless the trust instrument says otherwise, beneficiaries do not get a vote in how a trust is administered.
Re: Pay Deceased Credit Card from Her Own Account
Quote:
Quoting
pg1067
Unless the trust instrument says otherwise, beneficiaries do not get a vote in how a trust is administered.
While I strongly agree with this point on a legal basis, and my attorney would have worded it more strongly, my father very strongly felt that he wanted all of us kids to work out any disagreements among each other and while he explicitly (unrelated to the law) said I had the authority to make unilateral decision, he also said (in writing) that he would be very unhappy if my siblings forced me to use that authority. And since I had to live with my family and did not have to live with my attorney, I followed my father instructions no matter how crazy it made my attorney. He specifically said (in writing) that he would rather I burned the money then let the money be an object of conflict. While none of the siblings thought I would do that, they all thought my father leaving his grave and hunting us all down was a possibility. When everything was done, I though the extra time spent bringing everyone on board was a good thing.