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tak
geo's henchman




Registered: 11/20/00
Posts: 3,776
Loc: nowhereland
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My mother died -- need some advise
#8003931 - 02/10/08 09:05 AM (15 years, 11 months ago) |
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My mom died last night and my sister and I had some questions about some of the monetary issues that are to come.
She has $30,000 in student loans that are unpaid, aswell as a couple credit cards with balances on them. I am pretty sure the cards will be defaulted, but what about the student loans? Will we have to pay these back?
She doesn't have much money in her savings, we are using that to pay for her funeral and other expenses.
She has about $60,000 in her 401k, are we going to pay the same penalties as she would if we opted for a cash out? Or is it required that we put the money into an IRA?
Will this retirement money be used to pay off her outstanding debts before we can touch it?
thanks
-------------------- The DJ's took pills to stay awake and play for seven days.
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GnosticWarrior
Hermit


Registered: 03/11/07
Posts: 241
Loc: Oahu, Hawaii
Last seen: 14 years, 8 months
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Re: My mother died -- need some advise [Re: tak]
#8004316 - 02/10/08 11:41 AM (15 years, 11 months ago) |
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Quote:
root-ninja-tak said: My mom died last night and my sister and I had some questions about some of the monetary issues that are to come.
My condolences on the loss of your mom.
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She has $30,000 in student loans that are unpaid, aswell as a couple credit cards with balances on them. I am pretty sure the cards will be defaulted, but what about the student loans? Will we have to pay these back?
No, not unless you co-signed on any of these loans.
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She doesn't have much money in her savings, we are using that to pay for her funeral and other expenses.
Her creditors would have claim to this money. But I'd spend it to pay for her funeral only bcs you wouldn't know when you'd get the 401k money to pay for these expenses. I assume the creditors could let you know later that you have to pay the money back.
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She has about $60,000 in her 401k, are we going to pay the same penalties as she would if we opted for a cash out? Or is it required that we put the money into an IRA?
Only a spouse can Roll Over 401k assets into an IRA. You and your sister need to find out your payment options with the 401k plan administrator. They would prefer a lump sum distribution but you might have the option to stretch those payments out to reduce the tax liability.
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Will this retirement money be used to pay off her outstanding debts before we can touch it?
Her 401k is not touchable by her creditors.
I'm am not a tax, bankruptcy, or estate professional. My answers may be wrong and you should consult an attorney who specializes in this area.
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Veritas

Registered: 04/15/05
Posts: 11,089
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Re: My mother died -- need some advise [Re: tak]
#8004352 - 02/10/08 11:54 AM (15 years, 11 months ago) |
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First of all, I am very sorry for your loss. It is difficult enough to lose a loved one, without adding the burden of resolving their financial affairs.
Second, I recommend checking out your state probate court site for information. Here is a link to state probate courts:
http://estate.findlaw.com/probate/probate-court-laws/state-probate-courts.html
From what I know, the student loan debt will be forgiven, but the credit card companies have the right to collect the debt from her estate. If there is nothing left after her funeral costs, then the credit card companies will have to write off the debts. You will not be held responsible for her debts unless your name was on the account.
As to her 401(k) funds, you will have to check with her plan administrator. It will depend upon whether you were listed as the beneficiary on the account, what the plan's rules are regarding IRA rollovers, etc... Here's a link to some basic info. about rolling it over into a special inherited (aka "beneficiary) IRA:
http://www.pathtoinvesting.org/investinggoals/estateplan/401kinh/ig_401kinh_021.htm
I would also recommend consulting a CPA regarding your choices in dealing with the inherited account, as well as whether the account will be considered part of her taxable estate (and therefore to be used to settle her debts prior to distribution to her heirs).
Did she have a will, or will the probate court have to decide the disposition of all of her assets? A will still has to be reviewed in probate court, but it greatly simplifies the process.
I wish you well, and hope that the process of resolving her financial affairs goes smoothly for you. The site that I linked to above (FindLaw) has many articles regarding estate law, so you may wish to read through them prior to meeting with a CPA and/or lawyer.
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tak
geo's henchman




Registered: 11/20/00
Posts: 3,776
Loc: nowhereland
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Re: My mother died -- need some advise [Re: Veritas]
#8005213 - 02/10/08 04:04 PM (15 years, 11 months ago) |
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Thanks for the help friends. I'm not too worried about these things, and theres plenty of people helping to get everything taken care of with us...but reading your replies and some of the links you posted definately helps me not worry about it as much, because alot of the problems I was facing were only misconceptions I had about how things worked.
Thanks again for the help
-------------------- The DJ's took pills to stay awake and play for seven days.
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Cherk
Fashionable


Registered: 10/25/02
Posts: 46,493
Loc: International
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Re: My mother died -- need some advise [Re: tak]
#8011559 - 02/12/08 12:34 AM (15 years, 11 months ago) |
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hey hey hey man godamn pay for the hole in the ground then take the rest and hide it from those dirty ass son of a bitch collectors buy a gun and shoot in the air when they knock at your door yeah yeah
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I have considered such matters. SIKE
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itsbreck
Crunk


Registered: 01/25/06
Posts: 447
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Re: My mother died -- need some advise [Re: Cherk]
#8014531 - 02/12/08 07:21 PM (15 years, 11 months ago) |
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goddamn... sorry man.. unfortunatly the dead leave problems behind...i've been in this situation many times....no advice..do what you think is best
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itsbreck
Crunk


Registered: 01/25/06
Posts: 447
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Re: My mother died -- need some advise [Re: Cherk]
#8014538 - 02/12/08 07:22 PM (15 years, 11 months ago) |
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Quote:
cherokee said: buy a gun and shoot in the air when they knock at your door yeah yeah
nvm man... thats obviously the best answer
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Yarry
Old Timer



Registered: 01/04/04
Posts: 23,762
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Re: My mother died -- need some advise [Re: itsbreck]
#8018655 - 02/13/08 05:36 PM (15 years, 11 months ago) |
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I wish I could give you some advice, but all I can say is that im incredibly sorry for your loss.. If you need someone to talk, pm me.
-------------------- Grumpy Old Man.
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GGreatOne234
Stranger
Registered: 12/23/99
Posts: 8,946
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Re: My mother died -- need some advise [Re: tak]
#8022622 - 02/14/08 02:16 PM (15 years, 11 months ago) |
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sorry to hear about your mother
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