Q: Refunds to a POD account become estate assets? POD Beneficiary liable for taxes on unpaid loan? Medical bills?
My dad died with only a small bank account ($10,000) with a POD account which is now on hold until death certificate. There will be a refund from a preneed funeral account and a refund of rent from his assisted living facility. Since both were paid out of the POD bank account and that is the only account with his name on it does the account need to wait for these checks before having it changed to the beneficiary?
He has a personal loan with Marcus Goldman Sachs for just under $5000. Does his POD beneficiary assume the tax liability of default since he has no estate? Does he have no "estate" since he has no probate-able assets? Since there is only the POD account is anyone legally responsible for his final medical bills or the personal loan?
A: This is why no one should try DIY administration. Hopefully you have not exposed the estate assets to creditors by paying bills from his POD account prior to transferring it to your name. Estate assets can be protected from creditors (except funeral bills) by waiting 6 months to open estate, but that protection is destroyed by choosing to pay some bills and not others. If you had the bank change the account to your name prior to paying bills, the refunds should be payable to you. Even if you did not, technically legal title vests in you at the moment of death, so refunders should make refund checks to you, but they may refuse. No harm in asking, but you’d be better off consulting with an expert probate lawyer who can review the precise facts, advise you, and instruct the payors to make refunds to you. Third parties are not responsible for a decedent’s bills.
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