Advice on MIL/Debt/life ins

[archiethedragon]

Life insurance policies have a beneficiary that the policy pays out to. This is typically considered outside of the policy owners (your MIL) estate. So the credit card companies would not have access to it.

But life insurance is going to be expensive for your MIL. My advice would be for you or her to take the premium payments you are willing to make every month and put that in a savings account.

[tacokick]

If she doesn’t have any or very few assets at death then credit card companies and who ever holds any other debts she might have won’t be able to collect. There is a hierarchy of how people get paid after a death and the manager of the estate pays them off until there is nothing left. You wouldn’t be responsible for it personally.


Life insurance would be outside of probate and not counted as part of her estate so you can use it for whatever. But it would be expensive for her to get at her age.

She probably would get the trailer after her partner died but it would depend on how the paperwork was set up (are they really joint owners?) and if there is a will since they aren’t married. If she isn’t an owner and there is no will leaving it to her, in many states his half would then go to his next of kin whoever they are.

As for the items in the trailer, you can hire junk haulers or pickers for pretty cheap if you just want it all gone.

[ellipses84]

What does the $72/month pay out? If it’s 10k+, or you don’t think she’ll live another 10 years, it’s probably worth it. $10k might not be enough though. You can also look into making all funeral arrangements now, basically locking in a price and making sure the life insurance will cover it. I would pay for the insurance, not have her do it, since you will be the ones dealing with it.

You said plenty of money is coming in. If she’s still working, there’s a possibility her job provides some sort of minimal coverage.

DH was mostly estranged from his dad but had to deal with everything because his youngest brother who was supposed to handle everything passed away unexpectedly a year before his dad. He just sent the death certificate to the credit card companies and said he’s dead, he has no assets, and no family that wasn’t estranged from him. DH actually never got the life insurance money he was supposed to get, but that’s another story. We certainly weren’t going to pay off his debts before getting LI money and the CC accounts needed to be closed. He was a veteran so that covered cremation (I think… he died in a work accident so they may have paid it) and DH gave all his stuff away to relatives who wanted it first, then coworkers / strangers / goodwill.

[Susie]

PPs have covered most of it, but how does she have "plenty coming in" to pay for life insurance premiums, but isn't putting it toward getting the credit card debt under control?

From where you sit, I wouldn't worry too much about the credit card debt.  It's unsecured, and can't be collected if the estate doesn't have assets to cover it.  It won't become your responsibility as long as you never cosign anything.

If you were thinking of covering life insurance premiums for her, you could instead start a fund into which you deposit the money each month, instead of buying a policy.  It could at least get you on your way toward funeral expenses when the time comes.

[sadlebred]

Just remember that HER estate is responsible for any debt....not you/your DH or her family.

[simpsongal]

If it’s funeral expenses you’re concerned about I’d look into a prepaid funeral plan. My grandfather did this. You can pay in advance for all funeral arrangements. Agree with OPs that it’s likely not financially worth it to buy life insurance at this point.

[pierogigirl]

Are you the executors? Do you have a good relationship with her? If no to both, then it's not really your problem unless you want it to be. PPs are right that the credit card companies have a certain amount of time to try to collect (in NY it's 7 months) and then they will write it off.

Cremation will be cheapest. Five years ago, when my father died, it was $2100. An urn can be a few hundred. Does she belong to a church? They will sometimes do the funeral for not much money. I believe we paid a few hundred and his church friends did the reception. Funeral homes can be very expensive.

[cjcouple]

I'm off to bed but will delete in the am.

[ellipses84]

That’s tough. Is there something stopping her from doing the LI. There are really easy online options that don’t require a medical exam. If she won’t agree to LI I think the only thing you can do is save the premium every month or put a deposit down and pay a funeral home on a payment plan. Social security offers a tiny death benefit amount that can go towards cremation.

[cjcouple]

thanks again everyone.

I deleted because I didn't want to leave this out there since its really not my place. I really do appreciate everyones thoughts ans advice.