Mom quit claimed her property to us, her kids, in February, she died recently. Can her unsecured credit card debtors come after the property?

You need to speak with a real estate attorney and one who deals also with probate laws as she’s dead.

Quit Claims sound all terrific, as in theory you find a download somewhere online and fill it out as a DIY & signatures done & hopefully notarized; but QCDs do NOT necessarily transfer ownership. The only way QCDs work imho is if its done by an atty and included in a court order, signed by a judge, like you get the house via a QCD in a divorce.

Here’s the rub..... QCDs do not guarantee ownership.
For that you need a Warranty Deed as WD guarantee ownership & have title co. involved in some way to establish this; and then WD registered or filed onto the chain attached for the exact parcel or PPIN at the courthouse.
QCD transfers what they “think” they own, but if any securitized lending tied onto the property - like a mortgage or Heloc - OR unsecured lending that has a signed Memo / Terms of Agreement or Enrollment tied to the property - like what Medicaid can do in TIFRA states - OR unpaid debt on the property, like past due taxes, then the property cannot be actually fully transferred as there are “clouds” on the title. You can file the QCD at the CH but clouds will be there... lurking. CH will take the $ to file anything but it doesn’t mean it is valid.

QCD & Cloud issues will eventually float up. scenario tends to be:
- new “owners” want to get some sort of lending, like to build or renovate, so go to the bank to get a loan. Banks nowadays will want to see a WD on the property as QCD doesn’t guarantee so no lending.
- heirs want to sell property; buyer who loves the place goes to get a mortgage. Mortgage co won’t do lending at all on QCDs as too much risk. Deal killed.
- Or you end up selling super cheap as there’s risk for the buyer.

To get around these & establish guaranteed ownership, you probably gotta do a Quiet Title Action. Quiets are never ever a DIY, trust me on this. It’s speciality legal, not crazy paperwork but has a very strict wording & time line on notices and call outs. I’ve done tax sale buys and Quiets are routine to get guaranteed legal on the property. Even tho the courthouse changes the ownership name from the legal stamped tax sale document filing and new tax bills have name change, you imho have to Quiet before spending $ on tax sale acquired as too much risk otherwise. The atty I’ve used does mainly RE site selection / clearance work with Quiet as side gig. $4-5k and at least 6 months / a year for notice runs.

Also please keep in mind, if multiple heirs and all have thier names on QCD filed at the CH, should any of them have judgements or debts, that sits on the property too. This happened a lot after Katrina with property passed down. There would be 1 or thier spouse with judgements. It’s one of the reasons why 15 years later property still untouched. Also it’s part of their assets in any borrowing they try to do or divorce negotiations.

CC is unsecured debt. But your going to have to do some sort of probate action to get the 50% car Ownership moved. So her name will be filed within probate system. Secondary debt collectors do surf probate filings and do file debts against the deceased as it’s cheap to file. Whether they do or not imho kinda depends of what your state does for “Level of Claim by Class”. It’s something to clearly discuss with the atty. Make sure everyone understands!

Really please please find an atty before you do anything with the place.

After FIL died, one of the first things DH did, as executor, was to pay off all FIL's outstanding debts. He had accrued them and the CC companies expected and deserved to be paid. Some gave DH a break in the total, but some, not so.

We paid the dentist $800 for a full set of dentures that were useless. Would it have been appropriate to essentially rob the dentist who had these made and fitted? Just b/c my FIL never used them makes no difference.

And yes, FIL's atty did tell DH to makes sure the debts were, in fact, legit. There were a couple that were not.

also keep in mind that any debtor that is owed over $600 can write off the debt AND file a 1099-C (Cancellation of Debt) sent to the person with their SS# on the 1099 & with a copy going to IRS. Even if they are dead. CC companies routinely do 1099-C and it will be the amount owed on the CC plus interest & whatever fees that can be tacked on. Hospitals and providers do these too. For a biz to write it off on their taxes, the 1099-C has to be done.

Why it matters is the $ amount in the 1099-C is considered taxable income with taxes required to be paid to IRS on the amount. If your state has personal income taxes, state will get the form as well, so state tax liability also. IRS can do an estate lien and they do it quickly. A Judge in my experience is not apt to sign off on any distribution of assets (like that car) if there’s a tax bill as those assets can be sold to pay towards the IRS taxes owed.
Remember, in order to request a distribution be done, you have to sign off under penalty that the information provided to court are accurate.

The 1099-C are different than getting a debt against the estate from doing a Notice to Creditors announcement (which basically informs creditors that probate is opened and they need to file their claim to XYZ to get in line to possibly having it paid as a debt of the estate, so if they didn’t file a claim onto the probate docket, too bad). NOC claims imo an executor kinda can deal with as you kinda might negotiate it.
But 1099-C is an IRS filing of taxes owed. Once done, no negotiating.

The secondary debt collection outfits can’t do the 1099-C (these only the OC aka Original creditor can issue). But they can file a claim against the estate. Again filing a claim is inexpensive & easy to do if you know the requirements. Ive been an executor x3 and more than once have been in line with a runner filing a stack of claims on several dockets for small law firms who represent local Cable, phone, utilities, pest control companies.

Really schedule an appointment with attorney and take all paperwork from the QCD, Moms old will, property tax bills, all ownership home documents including Act of Sale & Release of Deed of Trusts, title on the car, your fathers death certificate and his will.
If y’all did stuff wrong, or Medicaid involved, best to know it ASAP.

Also her old homeowners insurance is void. You will need to get a vacant dwelling policy which are done by independent insurance agents & somewhat pricey.

I think the timing maybe questioned. But this is a good question. Your profile says she is living at home. As long as Medicaid was not used for health insurance, in home care or care in a NH, that doesn't come into the picture. If she did get Medicaid in any form, then her house is subject to a lean and changing owners so close to her death may cause a problem.

If Mom had any insurance policies, the beneficary is not responsible to pay any bills. But her having a home that could have been sold to cover her debts ... thats different. Even if the house had been left to someone, debts come first. Either the house is sold on the one inheriting pays the debts.
A consult with a lawyer maybe all you need to get answers.

I don't understand why people think it is okay to get an inheritance and leave bills unpaid. Everyone pays when debt is left unpaid. If people worried about the integrity of taking money they never intend to repay maybe inflation wouldn't be through the roof.

I am sorry that you lost your mom, but you should sell the house and pay back the money she borrowed. It is the right thing to do.

This is really a question for a qualified lawyer in your state. It may have to do with WHEN she did the quit claim. Etc. I think if there is any recovery expected for care that was paid for by taxpayer money, ie medical and etc. there will be lots of investigation into assets and they would not take lightly any attempt to hide assets, so I would take great care. There are some on the Forum who DO practice law and who DO have a lot of experience in Estate management; they may know the answer. But I myself would trust only the word of a lawyer in the state where this occurred. It is my "feeling" that this home, given to you with a quit claim, can't be touched, but you cannot now rely on the feelings of people on any forum, so do check with someone knowledgeable in this field.

My first thought is this: Make sure anything you pay (or not?) is a legit debt of your mother's. It used to be a somewhat common scam for criminals to send a realistic-looking bill in the mail to a deceased person with the hopes that their estate will just pay it either out of grief or out of assuming it was real and someone else knew about it. This was back to when death notices were in the newspaper all the time, but it likely still goes on.

That said, credit cards are legal arrangements. A lot of people view credit cards as kind of a joke, but it's a loan and there were repayment terms involved. Credit card companies take themselves very seriously and I'm sure they will pursue their money until they run out of options. An attorney can tell you what collection options credit card companies have under these circumstances. If you don't feel a moral obligation to pay these, please consider that it might be less hassle in general and cheaper than an attorney fee to just pay the bills and be done with it.

Hello everyone and thank you for all your helpful answers. I thought I'd give a quick update. Arizona is a very strong property rights state and we have automatic homestead exemption. This protects equity in the home up to $150k. I spoke to an attorney yesterday who said that the property will not be taken. Credit Card companies cannot put liens on unless they take her to court while she is alive. They might file that 1099-C to the IRS, but we don't know that for sure.

Since the property is no longer in her name it is therefore not in her estate at time of death, and since it is worth less than the threshold of $100k and her personal assets are worth less than $75k (waaaaayyy less) I don't have to notify the creditors. I don't have to go to probate court, I can do an "informal probate" and just file it with the court. After 30 days from death I can do an Affidavit of Small Estate and simply have it notarized and this will allow me to get the old car (over 20 years old) fully into my brother's name and any other dealings with her affects.

Medicaid cannot take the property but could file a lien on it, (which we can pay off over time) if they determine that the value of the property was over the threshold at the time of application for medicaid. She was in home hospice care for only about a month, and I might be mistaken about this but I read earlier, before her death, that it is the long term care, either in a nursing home or at home, that would be deemed retrievable from her estate.

I am sorry about not paying the credit cards, I had intended to pay as I could but as it turns out the level of debt she had was far past what I had thought it was. My 2 brothers and I live on the property and have invested a lot of our own money building and improving. We did not know that Mom was accumulating all this debt. My feeling is why should we, my brothers and I lose our home and all that we invested? I moved onto her land to take care of her years ago.

In my view credit card companies should not hand out cards so easily to someone living on social security, in fact below the poverty level. She had no way to pay this back on her income. They have probably received, through interest payments, much of what she borrowed. This could be construed as predatory lending on someone vulnerable. That's MY feeling about it. It quite simply got away from her. It is is easy to do when you are poor.

I hope this helps someone else who might find themselves in similar circumstances. Be sure to speak with an attorney in your state and find out the facts.

Thank you everyone!

No. Unsecured means just that.