When a parent dies, the adult children often ask if they are responsible in any way for the debt that is left behind. The quick and easy answer is, no, you are generally not responsible for the debts of your loved one who passed away. There are exceptions however, and it is important that you take the next steps properly after someone passes to ensure that you are not liable for any debts they may have. In many cases a parent or other loved one who passes away has debts that exceed their liabilities. Even if you are named as an executor in a will, no one can require you to administer the estate, pay their debts, or otherwise deal with estate assets. However, there may be sound reasons why you want to do so. Once you are sworn in as an executor, you are required to handle the assets according to law, and you are liable if you mishandle assets.
You are only responsible for handling the assets correctly.
In many cases when we look at the assets and debts of a person who has passed away, we find that their estate is essentially bankrupt—that is, that there are not enough assets to sell in order to pay off any debts of the estate. Typical debts of someone who has passed away include medical bills, credit card bills, past due rent, or mortgage and foreclosure debts. Of course, if there are assets and they have any value, we can sometimes salvage the estate.
By opening an estate, you are not personally liable for more than what is in the estate. As a very simple example, suppose this is the estate:
$60,000 Assets
$100,000 Debts
In this example, if you open the estate, you are only responsible to liquidate the $60,000 in assets (that is, sell the house, stocks, car, etc. that makes up that $60,000 in value) and pay the debts you are able to (more on that below). You are not responsible to personally pay for the other $40,000 in debt as long as you follow the law.
How do you decide which debts to pay?
Deciding which debts to pay is not difficult in most cases because the law already provides for what order creditors are to be paid off. As an executor, your job (in consultation with an estate attorney) is to ensure that the top-priority creditors are paid. As long as you do that in the proper order, you are not liable for the debts that are not paid.
Why would I open an estate if I’m just going to pay off some debt?
The advantage to opening an estate that will not pay all of its debts is that we can pay the executor a fee (this is a top-priority debt) and reimburse family for funeral expenses (also a top-priority debt). A good estate attorney can help you to ensure that you are following the rules and that you will not be personally liable in the end.
However, if you open probate and misappropriate the assets or if you take assets for yourself out of probate and chose not to pay all the creditors, then you will be liable for the amount of the property that was misappropriated. You can also be liable to the Department of Revenue if you have failed to pay the taxes on the assets involved. This is why it is important to consult with a probate attorney.
Guarantors and Co-signers are still liable.
Of course, we should also take note that an individual’s death does not change your obligation to pay any debt you are a co-signer on. If you co-signed on the decedent’s student loans or their car loan, you will still be responsible for that debt, personally. This is true whether you open an estate or not—but it may be an additional reason to open an estate and see if estate assets can lawfully be used to pay off that debt.
Finally, children can be liable for misappropriating their parents’ assets during their lifetime if those assets should have been used to pay for medical care. The Department of Human Services sometimes seeks contribution for costs that were incurred by the government for medical care if the children misused or failed to preserve assets in certain situations. Once again, this would be true regardless of whether an estate is opened.
Conclusion: Call a probate attorney at Cornerstone Law Firm today
As with many legal issues, there are many complications that can arise out of an estate. If you have any particular concerns or want to get in contact with an attorney regarding an estate, give us a call at Cornerstone Law Firm.
Small Business Week: Bold River Marketing
/0 Comments/in Berks County /by Cornerstone LawKeeping up with Corporate Formalities
/0 Comments/in Business Law, Nonprofit Law /by Cornerstone LawCornerstone Attorney Wins Appeal Blocking a Warehousing Plan in Maxatawny
/3 Comments/in Berks County, Updates /by Cornerstone LawOn April 6, 2023, the Commonwealth Court ruled in favor of the homeowners in the case of Robert P. Grim v. Maxatawny Township Board of Supervisors, No. 1452 CD 2021. The decision blocks a warehousing development plan for 12.1 million square feet of farmlands near Route 222 and Long Lane Road in Maxatawny Township. The plan would have created two warehouses that operated 24-hours, seven days a week, for 1,800 tractor-trailers. The Commonwealth Court agreed with Attorney Joel Ready’s arguments that the developer failed to get a zoning variance and special exception from the Zoning Hearing Board.
For more on this:
Cornerstone Law Firm Opens Second Location
/0 Comments/in Updates /by Cornerstone LawSolar Panel Installation Fraud
/0 Comments/in Construction, Property /by Cornerstone LawIf you’re a homeowner, you’ve likely been approached by a solar panel salesman at your home or over the phone trying to sell you on the benefits of “going solar.” While the opportunity to eliminate your electrical bill sounds good on the surface (and may be if done through an ethical solar company), for many homeowners, the reality turns out to be a nightmare.
Due to the many government subsidies available, solar panel installation companies have been out selling hard to sign up as many subsidy customers as they can. They often overpromise delivery times in the process. These “great deals” tend to come paired with a loan at a tough interest rate that was supposed to be paid by the electric savings. The consequences for a months-late installation can be serious for the homeowner.
In other cases, companies take payment and never deliver on the product at all, leaving the homeowner holding the bag for the equipment. And of course, there are still other solar panels companies that install faulty panels and can never seem to get them working before they stop answering the phone.
At Cornerstone Law Firm, we have had a lot of experience dealing with solar panel companies and the third party loan companies that they work with. In these situations, what options does a homeowner have? One option is to file suit and to pursue the money that was paid to the solar panel company, and to try and repay it to the loan company. Another option is to file suit against both for unfair trade practices under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law. In addition, many of these contractors have violated the Home Improvement Consumer Protection Act in the way they have gone about signing up individuals and with the contracts they had them sign.
Each case is different and is fact-specific. Where government money has been misappropriated or claimed by a company that never performed work, there may be additional remedies. If you or your family have had contact with solar panel companies that are unscrupulous, call today to set up a consultation so that we can help you determine what your rights are, and what your best steps forward are.
Cornerstone Attorney Successfully Wins Six-Figure Judgement for Berks County Contractor
/0 Comments/in Berks County, Business Law, Construction, Updates /by Cornerstone LawOn Wednesday February 1, 2023, Attorney Joel Ready received a favorable verdict from a Berks County jury on behalf of one of our clients. The client was suing a homeowner who failed to pay a substantial bill for work done on their house. The case was a three day jury trial, heard in front of Judge Sprecher in the Berks County Court of Common Pleas. The trial involved multiple witnesses, experts and engineers.
The jury was out for about an hour and a half before returning a verdict of well over a hundred thousand dollars on behalf of Cornerstone’s client.
“We are very pleased to obtain a favorable verdict on behalf of our client,” says Joel Ready, the attorney who handled the case. “Collecting bills is an extremely important part of a successful business’ operations and we were glad to defeat the workmanship claims made by the homeowners in this case.”
For Berks County businesses, Cornerstone Law Firm continues to be a resource in collecting past due bills, helping to defeat spurious claims of bad workmanship, and more. If you have a construction case, as either a homeowner or a contractor, and wish to discuss a problem, or if you are a business owner and wish to talk about debt collection, call Cornerstone Law Firm today for a consultation.
Cornerstone case granted appeal by SCOTUS
/in First Amendment, Updates /by Cornerstone LawIn 2020, Cornerstone Law Firm attorney David Crossett represented a mail carrier from Lancaster named Gerald Groff. Mr. Groff sued the United States Postal Service for their failure to accommodate his religious beliefs regarding working on Sundays. The case eventually ruled in favor of the USPS, citing a precedent set by the 1977 Supreme Court case “Trans World Airlines v. Harding.”
Mr. Groff later brought the case before the Supreme Court and asked them to reconsider the original ruling from the Harding case. His case was the 4th in recent years to push back on Harding’s precedent, and SCOTUS has granted certiorari in regards to this case. (Certiorari is the process of a higher court reviewing a decision made by a lower court.)
The SCOTUS appeal is not being handled by a Cornerstone attorney, but we are interested to see how this plays out as the original case was brought to trial by one of our own. It’s rare that a case is heard by the Supreme Court, as they only review about 60 cases per year. Depending on the ruling, Groff v. DeJoy has the potential to set a new precedent for similar religious liberty cases.
If you’re interested in learning more about this case, here are some resources:
SCOTUS Blog Post #1
SCOTUS Blog Post #2
SCOTUS Blog Post #3
Advisory Opinions Podcast
An early press release about this case
Am I Responsible for My Parent’s Debts?
/in Estate Administration, Wills /by Cornerstone LawWhen a parent dies, the adult children often ask if they are responsible in any way for the debt that is left behind. The quick and easy answer is, no, you are generally not responsible for the debts of your loved one who passed away. There are exceptions however, and it is important that you take the next steps properly after someone passes to ensure that you are not liable for any debts they may have. In many cases a parent or other loved one who passes away has debts that exceed their liabilities. Even if you are named as an executor in a will, no one can require you to administer the estate, pay their debts, or otherwise deal with estate assets. However, there may be sound reasons why you want to do so. Once you are sworn in as an executor, you are required to handle the assets according to law, and you are liable if you mishandle assets.
You are only responsible for handling the assets correctly.
In many cases when we look at the assets and debts of a person who has passed away, we find that their estate is essentially bankrupt—that is, that there are not enough assets to sell in order to pay off any debts of the estate. Typical debts of someone who has passed away include medical bills, credit card bills, past due rent, or mortgage and foreclosure debts. Of course, if there are assets and they have any value, we can sometimes salvage the estate.
By opening an estate, you are not personally liable for more than what is in the estate. As a very simple example, suppose this is the estate:
$60,000 Assets
$100,000 Debts
In this example, if you open the estate, you are only responsible to liquidate the $60,000 in assets (that is, sell the house, stocks, car, etc. that makes up that $60,000 in value) and pay the debts you are able to (more on that below). You are not responsible to personally pay for the other $40,000 in debt as long as you follow the law.
How do you decide which debts to pay?
Deciding which debts to pay is not difficult in most cases because the law already provides for what order creditors are to be paid off. As an executor, your job (in consultation with an estate attorney) is to ensure that the top-priority creditors are paid. As long as you do that in the proper order, you are not liable for the debts that are not paid.
Why would I open an estate if I’m just going to pay off some debt?
The advantage to opening an estate that will not pay all of its debts is that we can pay the executor a fee (this is a top-priority debt) and reimburse family for funeral expenses (also a top-priority debt). A good estate attorney can help you to ensure that you are following the rules and that you will not be personally liable in the end.
However, if you open probate and misappropriate the assets or if you take assets for yourself out of probate and chose not to pay all the creditors, then you will be liable for the amount of the property that was misappropriated. You can also be liable to the Department of Revenue if you have failed to pay the taxes on the assets involved. This is why it is important to consult with a probate attorney.
Guarantors and Co-signers are still liable.
Of course, we should also take note that an individual’s death does not change your obligation to pay any debt you are a co-signer on. If you co-signed on the decedent’s student loans or their car loan, you will still be responsible for that debt, personally. This is true whether you open an estate or not—but it may be an additional reason to open an estate and see if estate assets can lawfully be used to pay off that debt.
Finally, children can be liable for misappropriating their parents’ assets during their lifetime if those assets should have been used to pay for medical care. The Department of Human Services sometimes seeks contribution for costs that were incurred by the government for medical care if the children misused or failed to preserve assets in certain situations. Once again, this would be true regardless of whether an estate is opened.
Conclusion: Call a probate attorney at Cornerstone Law Firm today
As with many legal issues, there are many complications that can arise out of an estate. If you have any particular concerns or want to get in contact with an attorney regarding an estate, give us a call at Cornerstone Law Firm.
Modifying Custody
/in Custody, Divorce, Family Law /by Cornerstone LawIf you’ve reached a custody agreement with someone, it’s not set in stone forever. Circumstances change, people change, and of course custody arrangements have to change. This is especially true if you reach a custody agreement with someone when the child is young. As the child grows older, changes will need to be made.
Custody agreements are never really final, and neither are court orders regarding custody. Either party may move at any time for a reconsideration of custody. Of course, immediately after a trial, when a judge has made a decision on the merits, changes are unlikely to be seriously considered or granted. Judges look for a change of circumstances when considering motions to modify custody.
So what sort of change of circumstances might bring about a new custody order? If a judge previously found that one of the parties was not fit to have as much custody time because of a drug problem, mental illness, or a past history of being unwilling to care for the child, then showing that one of these issues has been carefully addressed may result in a change of custody. Showing a course of rehab, having witnesses able to speak about the change of the party, or showing that the party has taken classes for anger management or other types of counseling that might help them can all be part of showing a change of circumstances. Perhaps the judge previously refused to give overnights to one party because their house was not in a good condition to live in or because they were homeless. Once a person has established residency and has an acceptable place for a child to spend overnights, the custody order can be modified.
Other examples of change in circumstances can be because the child, as they grow, needs something different from each parent. Perhaps the child is an athlete and has an opportunity by spending more time with one parent to improve their chances at an athletic scholarship. In other cases, courts have found a change of circumstances where one parent is able to help them with academic challenges that the other parent struggles with.
As you can see, there are a number of ways that a change of circumstances can be found by a court. Understanding the significance of these changes and preparing to prove them is all an important part of litigating custody matters, even after a custody order came down in a trial or other hearing. Whether you’ve reached a custody arrangement by agreement or by court order, there are ways to modify the agreement.
Of course, in all circumstances the best approach is to go to the other party and see if you can work it out as co-parents. Courts appreciate efforts that have been made to do this by co-parents and do not generally smile upon someone who comes into court without having tried to first work it out with the other parent. But when an agreement can’t be reached, going to court for a modification of custody is the next step.
If you have questions about how to approach a custody change, contact the custody attorneys at Cornerstone Law Firm regarding your situation. Our family law attorneys can help you figure out the best way for you to move forward with your custody matter.
When Winning Feels Like Losing
/in Custody, Divorce, Family Law /by Cornerstone LawThere is nothing more important in life than your kids. Fighting over who will have custody of your kids is the most stressful thing that most people will ever go through. From the first conversation with your lawyer to the last, you will be talking about “winning.” At the end of the process, what does winning really look like?
At Cornerstone Law Firm we work hard to help parents make decisions that will help them live peacefully with their co-parent and do what is best for their child. The hallmark inquiry in a child custody battle is what is in the best interest of the child. Unfortunately, two parents fighting over their child is never in that best interest, but it is all too common.
Even when you try to de-escalate with the other parent, the frustration of dealing with someone at their worst can cause you to lash out, to make mistakes, to say things you don’t mean, and to widen the gap with the other parent. Litigation costs a lot of money for both parents, and this also causes people to get their backs up against the wall and make bad decisions. Many parents feel they don’t have any option but to make it more personal as time goes on because the other parent is being unreasonable about their demands.
But as a parent, it’s important to “play the long game” when it comes to custody. Part of “winning” in a child custody dispute means making sure that your children don’t feel caught in the middle and don’t see you and your co-parent fighting. Winning means teaching your child to respect the other parent, even when they are not at their best. Winning means making your children feel safe. It is hard sometimes to control your frustration, but it is absolutely vital to helping your child feel safe.
This is why a lot of times winning looks like compromising. It looks like reaching a resolution. It looks like going further than halfway for the other parent.
None of this means that you shouldn’t fight for your kids. It doesn’t mean you shouldn’t litigate a custody dispute. But it does mean that your strategy should take into consideration building the new family arrangement that will be in place until your child reaches adulthood. At Cornerstone Law Firm, our attorneys are here to help you work through this painful process. We work hard to make sure that what we arrange is in the best interest of you and your kids and will help create a better world for them going forward.
If you’re in a custody fight, contact one of the lawyers at Cornerstone Law Firm so we can help you navigate this time in your life. Our attorneys are here to help you as you make these decisions for your children and your family.