Waterloo, NY asked in Estate Planning for New York

Q: In intestate insolvency, can unpaid creditors “claw back” beneficiary inheritance from a sole heir-in-law?

When an intestate estate is closed insolvent after tens of thousands of dollars were left to a sole heir-in-law in long-standing beneficiary accounts (>5 years old), and debts of up to a few thousand dollars were left unpaid, is there any way such creditors (possibly including Medicaid) would be able to “claw back” payment from the heir?

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2 Lawyer Answers
Michael David Siegel
Michael David Siegel
Answered
  • New York, NY
  • Licensed in New York

A: Your question has an inconsistency which makes it unclear. An estate is not "closed" insolvent if payments were made to beneficiaries. Further, "closed" is a formal term, meaning a final decree from the Surrogate. Do you have that? Medicaid can claw back if they made a proper claim, and if they made a claim an estate cannot close unless it was paid or rejected by the court. In short, I am unclear on the facts here.

1 user found this answer helpful

Benjamin Z. Katz
Benjamin Z. Katz
PREMIUM
Answered
  • Estate Planning Lawyer
  • New York, NY
  • Licensed in New York

A: If proper debts were ignored by the individual administering the estate, creditors can seek to be paid even 5 years later. I am unsure what you mean by long-standing beneficiary accounts. If assets passed outside the estate then it belongs to the beneficiary and would not be used to pay debts of the deceased.

1 user found this answer helpful

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