Q: Sister in law passed suddenly in August. She had borrowed $2,000 and owed $1,400 at the time of her death to her
employer. They are taking us to small claims court because they know my husband (her brother) is the beneficiary of the life insurance policy. The office manager has left several messages stating if we just wanted to go ahead and put a check in the mail to them rather than going to court we should go ahead and do that. We did not co-sign anything - he is not the executor or admin of her estate (she didn't have anything or she wouldn't have had to borrow money). Will a judge make us pay that back to them?
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A:
You do not owe the money. The estate of your sister owes the money. If they have already sued you in small claims court, you should answer saying that the debtor is deceased and you are not liable on the debt. Enclosed a copy of the death certificate. If you are forced to go to a hearing on the small claims action, bring another death certificate with you.
In order to collect, the employer must use the proper procedure, which is to file a creditor's claim in your sister's probate case. You don't have to pay if they don't follow the proper procedure.
A: Don’t pay them anything. The estate owes the money, not you. If they don’t file a proof of claim in 6 months, they get nothing. But under no circumstances should you pay them a dime, from the life insurance or any other source.
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