Alright, I'm putting this in "General" because I couldn't really find a sub category that addressed all the myriad issues I'm about to put out.
Here are the highlights:
#1 - this is not about me, its about my sister and brother in law
#2 - brother in law passed away on 7/2
#3 - all BIL's income died with him (all pension and social security disability). No, he never elected spousal benefits (long story)
#4 - they had no savings - but they also had no debt
#5 - sister is getting some disbursements from insurance policies as well as a small income from a death benefit annuity (this was a surprise, we didn't know it existed) for the next 36 months.
#6 - BIL was in the hole to the IRS to the tune of about $4500
#7 - I'm the executor of the estate.
Now, here are the issues:
#1 - MOST of the medical bills associated with BIL's illness are being taken care of by insurance. He was on Medicare, and had a supplemental insurance policy that has been paying out things that Medicare hasn't. We've paid at least four small medical bills ("patient responsibility") over the last two months (he had been in the hospital since 4/30, so things started to trickle in during May and June) only to have the uncashed checks returned with a letter saying "The balance has been paid in full by supplemental insurance". First question here.....and keep in mind Arizona is a community property state.....if there are any bits and pieces left over after supplemental pays out....is my sister responsible for paying these? Or is a "there is no estate so go pound sand" letter to anyone collecting an appropriate response?
#2 - The IRS. The money owed them is from returns that BIL didn't pay with balances due BEFORE they were married. My sister was not a party to these returns. MY tax attorney (yup, got one of those) told me to write the IRS a letter "respectfully requesting that they pound sand inasmuch as the taxpayer is deceased, and no longer has an income stream to give them". That was done, but we have not had a response yet. From what I understand, the money my sister has / will be receiving from the insurance / annuity is HERS and the IRS can't touch it. Opinions?
#3 - Back to the IRS again....obviously a return needs to be filed for tax year 2012. If we file it as a joint return, there will be approximately a $3400 refund coming back. I have been told (by above mentioned tax attorney, and two CPA's) that even if the IRS agrees to close the account, and write off the debt, once this return is filed, they will be all over that refund like white on rice. Question here is - since Arizona IS a community property state - wouldn't that refund be considered part of the community? And my sister would be entitled to 50% of that, giving the IRS the other 50%?
#4 - Here is the BK question - if the medical bills don't go away, and they amount to a large amount, then BK might be in my sister's future. Regarding the IRS, I realize that taxes are only dischargeable in certain circumstances...but since they are not HER taxes...I'm not sure what rules apply.
Any comments and / or advice anyone has will be greatly appreciated....
(Des...you out there?)
Here are the highlights:
#1 - this is not about me, its about my sister and brother in law
#2 - brother in law passed away on 7/2
#3 - all BIL's income died with him (all pension and social security disability). No, he never elected spousal benefits (long story)
#4 - they had no savings - but they also had no debt
#5 - sister is getting some disbursements from insurance policies as well as a small income from a death benefit annuity (this was a surprise, we didn't know it existed) for the next 36 months.
#6 - BIL was in the hole to the IRS to the tune of about $4500
#7 - I'm the executor of the estate.
Now, here are the issues:
#1 - MOST of the medical bills associated with BIL's illness are being taken care of by insurance. He was on Medicare, and had a supplemental insurance policy that has been paying out things that Medicare hasn't. We've paid at least four small medical bills ("patient responsibility") over the last two months (he had been in the hospital since 4/30, so things started to trickle in during May and June) only to have the uncashed checks returned with a letter saying "The balance has been paid in full by supplemental insurance". First question here.....and keep in mind Arizona is a community property state.....if there are any bits and pieces left over after supplemental pays out....is my sister responsible for paying these? Or is a "there is no estate so go pound sand" letter to anyone collecting an appropriate response?
#2 - The IRS. The money owed them is from returns that BIL didn't pay with balances due BEFORE they were married. My sister was not a party to these returns. MY tax attorney (yup, got one of those) told me to write the IRS a letter "respectfully requesting that they pound sand inasmuch as the taxpayer is deceased, and no longer has an income stream to give them". That was done, but we have not had a response yet. From what I understand, the money my sister has / will be receiving from the insurance / annuity is HERS and the IRS can't touch it. Opinions?
#3 - Back to the IRS again....obviously a return needs to be filed for tax year 2012. If we file it as a joint return, there will be approximately a $3400 refund coming back. I have been told (by above mentioned tax attorney, and two CPA's) that even if the IRS agrees to close the account, and write off the debt, once this return is filed, they will be all over that refund like white on rice. Question here is - since Arizona IS a community property state - wouldn't that refund be considered part of the community? And my sister would be entitled to 50% of that, giving the IRS the other 50%?
#4 - Here is the BK question - if the medical bills don't go away, and they amount to a large amount, then BK might be in my sister's future. Regarding the IRS, I realize that taxes are only dischargeable in certain circumstances...but since they are not HER taxes...I'm not sure what rules apply.
Any comments and / or advice anyone has will be greatly appreciated....
(Des...you out there?)
Comment