Your debts die with you

[Derleth]

@HeyHomie

On a somewhat related note, back in 2006 two tornadoes blew through Springfield, Illinois. One house that suffered damage had been empty for some time, its owner having died years before, though not necessarily derelict. Anyway, the twister blew an oak tree right into the house, destroying it beyond all repair. The City of Springfield wanted someone to do something about the decaying house, but there was a problem: the house had been left to the daughter of the woman who had owned it. The daughter, however, lived in California and was near destitute herself, and she told the City that she had neither the money nor the desire to pay for the necessary repairs, nor was she in a humor to come to Springfield to sign paperwork.

As far as I know, the house is still there, still with an oak tree in the middle of it.

That’s one good reason to have property tax: Preventing properties from remaining derelict for indefinite periods of time, with unclear title and, perhaps, in a condition which is an eyesore or dangerous to the surrounding community. Common Law has a mechanism—adverse possession—to bring derelict property back into the realm of economically productive real property, but it’s cleaner to simply have the property revert to the local government, which can sell it at auction to someone who’s willing to tear the building down and do something with the land.

[Elendil_s_Heir]

A historic case of unpaid property taxes (but not due to the death of the owner): Arlington House, The Robert E. Lee Memorial - Wikipedia

[Kron]

@Northern_Piper

The term isn’t referring to the borrower and the likelihood of dying before paying it off. Rather, historically the early common law had two different types of securities in land: “gage mort” and “gage vif”.

In a “gage mort”, the lender took title to the land, but could not use the lands or take the fruits of the land. The borrower continued in possession and took all the benefits of the land. That was a “dead pledge” because the lender technically owned the land, but the land was “dead” to him.

In the “gage vif” (“living pledge”) the lender took title to the land, and got the fruits of the land. The land was “live” to the lender.

The “gage vif” died out a long time ago, because it was much harder to pay off. In a “gage mort”, the borrower continued to have the income from the land and could use it to pay off the lender.

That couldn’t happen in the case of a “gage vif”, since the lender had the land and the fruits. The borrower had to have some independent source of income to pay off the “gage vif”.

Economically, a “gage mort” makes more sense and survived. Due to quirks in Law French, it eventually became known as a “mortgage”.

Huh. Thanks, that was fascinating.

[gotpasswords]

@Bijou Drains

depending on when you die during the month, the estate may have to pay back social security money paid out for the month you die in. The cutoff is early in the month.

You have to survive the entire month.

@Social Security Administration

Let us know if a person receiving Social Security benefits dies. Benefits aren’t payable for the month of death. That means if the person died any time in July, for example, the check received in August (which is payment for July) must be returned.

(from https://www.ssa.gov/pubs/EN-05-10153.pdf, page 16)

[Snnipe_70E]

@OldGuy

Social Security checks come a month in arrears. My April check comes the third Wednesday in May. This is standard though the week you get the check depends on your SSN. I don’t recall the algorithm.

My union retirement is the other way around, At the 1st of the month I receive my retirement check for the month. If I die on the 1st I am still entitled to the check. But if I die on the 31st and they have sent the check it has to be returned. I receive my check electronically and had to sign a form stating that if I die before the 1st of the month and the check has already been sent the retirement administrator can go into my account and take back the current months check that I am not entitled to.

[md2000]

@friedo

Usually what happens in those situations is that the town will eventually seize the property in lieu of unpaid property taxes.

How long before they do that? I vaguely recall where I lived once, they could start proceedings if you were 3 years in arrears. So not a “empty for a decade” situation. Plus unless the mortgage is paid in full, at least in Canada, typically the bank collects mortgage payment and property taxes together to ensure the city doesn’t try to take the bank’s pound of flesh.

@gotpasswords

You have to survive the entire month.
(from https://www.ssa.gov/pubs/EN-05-10153.pdf, page 16)

Because the government couldn’t possibly show some compassion by letting it go. After all, it’s not like people drop dead to squeeze a few bucks out of the system.

[edwardcoast]

@friedo

Not just collection agencies - stories are legion of banks, credit unions, even utility companies trying to guilt surviving relatives into paying off debts owed by the recently enstiffened.

Yes. I worked with a fellow who’s Uncle passed away and left his entire estate to him. The problem was, when the Uncle died he had bills and the entire thing had a negative net-worth. Immediately he was contacted expecting to pay the bills his Uncle owed.

[md2000]

@edwardcoast

Yes. I worked with a fellow who’s Uncle passed away and left his entire estate to him. The problem was, when the Uncle died he had bills and the entire thing had a negative net-worth. Immediately he was contacted expecting to pay the bills his Uncle owed.

Just curious how they knew? Is the executor obliged to tell anyone, or any creditors, the terms of the will? Until the estate is settled, I assume the heir does not become public record; and if there’s nothing to pass on, it’s not like his name got put on title to the house or anything . The executor would have sold that to cover what proportion of the bills he could. (Unless of course, nephew was executor).

I assume the rule is like bankruptcy, every unsecured creditor gets an equal share? Or can an executor pick and choose who he/she wants to pay first?

[friedo]

Probate is a matter of public record. When the estate is opened, creditors have the opportunity to file with the probate court to claim a share of the estate, similar to a bankruptcy.

[Quartz]

@Delicious

Are there generally rules or laws against trying to shift all a couple/family’s debt onto a terminally ill person while shifting assets the other way?

I can’t speak for the US, but in the UK things are monitored quite carefully if the person is the subject of a guardianship. The Office of the Public Guardian is here.

[Saint_Cad]

@md2000

How long before they do that? I vaguely recall where I lived once, they could start proceedings if you were 3 years in arrears.

Depends on the state. In most cases the county want the money not the property so the lien is sold to someone willing to pay for it. In Colorado the time period is 3 years meaning that 3 years after I paid the lien, I can file for a tax deed.

A side-note: I actually had a tax lien for a house that was three years old. The county (I won’t name it) advertised that a tax lien could be a cheap way to get property but of course when I filed for a tax deed they refused to process it saying as they put it on the phone they “didn’t want to take someone’s home away from them”* and in Colorado a writ of mandamus has to be filed with the Supreme Court directly :eek: so it would be difficult to force them to do their job… Six months later in which they had done nothing I got my investment back and the County claimed he paid his bill. I’m still not 100% sure I believe them.
*They also said it takes months for the county to do a title search which is complete BS.