Dying with debt

[nzwasp]

I can't seem to find anything about this online. But basically my father in law is dying and he has a bunch of credit card debt with td and cibc and a line of credit on his house which he claims will be protected by some insurance clause anyway he owns a house with his wife. Will the banks place a lien on the house in order to get their money back or are they shit out of luck and me as the executor I can just send them the death notice.

[01RedDX]

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[spikerS]

depends on what the insurance clause is. I know my LOC, mortgage, and HELOC when I had them, I took out an extra policy with the bank that would automatically cover the balance of them in the event of my death. Cost me an extra $12 or something a month to cover all 3 products. If that is the insurance clause you dad is talking about, then yeah, you may be fine. CC debt is a different beast all together.

[Buster]

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Yes because legally, the debtor's estate still owes the money. Just take his name off the title, takes 10 mins at the land titles office.

EDIT: This is for the credit cards, for the HELOC there's nothing you can do as it's secured against the house.

Do it now, because there are transference laws.

[nzwasp]

I presume the forms for transferring can just be done at the registry. Form from service Canada seems more complicated than it needs to be

[nzwasp]

So I found that the line of credit is jointly held and in 2003 it was 115k I have no idea what it is today as he's shredded all the statements. Anyway he got the optional life insurance to pay off the loc incase he died but I don't know if this matters if she is still alive?

[jacky4566]

Sorry to hear about your father in law.

Basically yes, If the credit cards are not already a lien against the house then they can legally go after any personally property he owns. Houses, cars, boats, stocks whatever they can until the debt is paid.

I would get a current title WITH all covenants. you can do this yourself using the SPIN2 system

As far as the ownership change. You want this form.

[nzwasp]

I was reading that it would be fraudulent to change his name at this stage since we know his cancer is terminal. So the banks could just overturn it in court. I couldn't find any timelines or fraudulent conveyance act for Alberta so I don't know how true that is. My wife seems to think we should pay off his credit card debt personally I think this is a big mistake since the estate will pay it and I don't want us to pay off his own debt.

[S-FLY]

Depending on who that line of credit is with, if it's collateral then it might be cross-collateralized and securing the matching institution's credit card.

If I were you, I'd be looking into that HELOC insurance that he claims he has. Then have him (or her, if he doesn't have the capacity), pay out and close the credit cards with the HELOC then let the insurance pay out the HELOC.

Also, you should probably be speaking to a professional, like a lawyer or accountant that specializes in estate planning. They may refer you to a mortgage broker to help figure out how to execute the best possible plan.

[KappaSigma]

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I was reading that it would be fraudulent to change his name at this stage since we know his cancer is terminal. So the banks could just overturn it in court. I couldn't find any timelines or fraudulent conveyance act for Alberta so I don't know how true that is. My wife seems to think we should pay off his credit card debt personally I think this is a big mistake since the estate will pay it and I don't want us to pay off his own debt.

Id argue its fraduelent preference.

[nzwasp]

He took a turn for the worse this morning after routine test perforated his small intestine. So now he's hours from death and will not die with a will. Has anyone had a relative die without a will in Alberta what's the process I know the government basically steps in and does it and it takes ages. But so many things are fucked up ie marriage certificate has wrong name, pension partner name was fat fingered into the system etc

[you&me]

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He took a turn for the worse this morning after routine test perforated his small intestine. So now he's hours from death and will not die with a will. Has anyone had a relative die without a will in Alberta what's the process I know the government basically steps in and does it and it takes ages. But so many things are fucked up ie marriage certificate has wrong name, pension partner name was fat fingered into the system etc

Sorry to hear.

My FIL passed away suddenly about 18 months ago and did not have a will. My MIL contacted a trust attorney who helped navigate taxes and disbursements. I wasn't overly involved in the process, but as I understand it, the majority of his assests escaped unscathed from creditors, including real estate, investments and life insurance. I wish I could provide more specifics. All I can say is that my MIL relied on professionals to do their jobs, during a difficult time where it would be very easy for someone to make a very expensive "mistake".

[nzwasp]

Thanks for the info

[Xtrema]

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Thanks for the info

Sorry about your lost.

Once everything has been transferred to your MIL and settled, I hope you can convince her to prepare better. The problem with Asians of that generation is that it's taboo to prepare for death and even more so during terminal cases. It compounds the problem if man of the house carry all the financial info and wife knows nothing.

Make sure you have all paper work in hand like life insurance, mortgage and talk to a professional. It's should be simple as your MIL is still around. Whatever left for your MIL, when she passes, it could be a bit more complicated without some planning.

And if English isn't their first language, make sure double check all policies. A lot of bank staff promised one thing and completely made you sign something else as long as they meet their quota. So you may not be as covered as you think.

As for not paying up credit card debt, I would defer this to the professionals. But consider his name is on the house and assuming you have at least 50% equity in it, your MIL (the estate) will probably have to pay.

[flipstah]

Sorry to hear about your family member, OP.

Can a will be created so that the sole executor receives all funding and then is responsible for paying off creditors?

[nzwasp]

It cannot be created at this point as he is not mentally alert enough to understand what he would be signing even if he wanted it to be that way. Yeah I have some of the documents I do not have for example any recent details about the heloc. He shredded all those which makes me think it's a lot bigger than the few thousand he claims. Although that is joint with his wife so I should be able to find something out.

[jwslam]

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Sorry about your lost.

Once everything has been transferred to your MIL and settled, I hope you can convince her to prepare better. The problem with Asians of that generation is that it's taboo to prepare for death and even more so during terminal cases. It compounds the problem if man of the house carry all the financial info and wife knows nothing.

Yea I'm pretty much banking on mom going before dad.

Back to op: I'm sorry for what you're going through.

[tonytiger55]

Sorry to hear about your father in law.
My uncle passed from Cancer a couple of years back, I had to sort his stuff out. In my banking days I also had to sort out stuff for deceased clients.

Upon passing and funeral make sure you have copies of his death certificate. It will come in handy when dealing with financial institutions. Bring two coipes of ID when dealing with the bank. You would be surprised how many people do not do this and travel for miles.
Once you tell the bank, the chequing accounts generally are transferred to spouse as right of survivorship if she is joint. BUT that depends if the signature cards have this option selected. If it’s a very old account then it is assumed.
The banks will freeze the accounts. Credit card companies will freeze the card.

FOR THE LOVE OF GOD. Do not assume the banks are your friend and are there to help. Only tell them what they need to know. They WILL Pull rank and work in their own interest.

If he has insurance, check the details if you can. As Executor you should gain access to paperwork and accounts.

[J-hop]

No offence to those in here but please ignore all the financial/asset advice and seek a professional opinion. The executor by Canadian law is required to settle the estates debt BEFORE addressing any of the beneficiaries. You CAN be held personally liable for the debt if you try to play games to circumvent it. Do not even entertain funny business like changing names on titles etc.

[nzwasp]

He is passed now so we don't have those options anyway. And I don't think I'm executor anyway since no will I am going to talk to a lawyer later in the week about the paper work we do have. I'm not convinced we have enough. I have his bank card and pin so I need to figure out if he was even paying insurance premiums too.