Whoops! I used my deceased sister's card

Charges made after death are considered fraudulent

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question Dear To Her Credit,
My sister just passed away. As she was dying, my brother and I were given her keys and purse. Since she passed away so quickly, we were scrambling to put together a memorial service for her. I took the cards, and I also took possession of her car.

After she died, I used one card to purchase gas for her car twice (about $40), and I took a cash advance for $300, plus I spent about $30 for incidentals. I have about $150 left in my pocket.

I had no idea I was committing a crime by using my sister’s card after she died. What can I do? We get the death certificates today or tomorrow, at which time I will return her car to the lender. Can I fix this? I used the money to buy clothes for her daughter for the service.  – Maria


Dear Maria,
I am so sorry to hear about the loss of your sister. What a tragic situation.

In hindsight, using her credit card after she died was not the right thing to do. After a cardholder dies, her credit card is no longer valid. It should not be used, even for items that seem urgent.

The credit card company will get a copy of the death certificate, on which they can note the date of death. Any charges after that date were obviously not made by your sister. A cash advance would seem to look especially suspect.

Fortunately, the charges you placed on the card were only a few hundred dollars. It could have been worse.

Credit card companies are primarily interested in getting paid. The larger the amount in question, the more resources they will expend to make sure they get repaid. If someone had used your sister’s card for several thousand dollars or more after her death, and there was not enough money in her estate to pay the balance, the bank would be more likely to prosecute.

The personal representative of your sister’s estate should follow closely the laws in your sister’s state to make sure all her bills are paid in the time, order and proportion required by state law. For example, the law may require a waiting period of six weeks from the date of death before bills are paid to give all the bills a chance to arrive. If there is not enough money to pay all debts in full, certain debts take precedence over others. At each level of priority, the bills are paid on a proportional basis, so the creditors receive their fair share according to state law.

The unused $150 from the cash advance on your sister’s card should go back into her estate. If possible, I recommend you pay back the remaining charges to the estate, as well. The personal representative of the estate may in turn decide to reimburse you for expenses related to the service, including funeral clothing and gas for running related errands.

As far as the car goes, the personal representative (or executor) should work with the family and the auto loan company to determine how to proceed. The family may want to pay off the car or continue making payments so they can keep the car. Or the representative of the estate may choose to sell the car and pay off the loan, or turn in the car to the loan company.

It’s important to note that if the personal representative turns in the car, and the net amount the loan company gets from the car at auction is less than the amount your sister owed, the loan company may send the estate a bill for the difference.

As you’ve discovered, it’s easy to make a mistake at a stressful time like this. Do the best you can to make this right, however, and you should be OK. If the bank investigates the charges made after your sister’s date of death and decides to press charges, seek legal help immediately. Your sister’s personal representative should also seek legal help if he or she isn’t sure how to deal with the estate.

Taking care of a person’s finances after they die can be complicated, and if financial matters are not dealt with properly, the person’s heirs may be shortchanged. In a worst-case scenario, the personal representative may even be held liable if any creditors don’t receive as much as they were entitled to. Qualified, local legal advice is well worth the price, to give you the peace of mind that comes with knowing your sister’s estate is taken care of legally and as it should be.

See related: 6 steps to take when a cardholder dies, What happens to credit card debt after death?

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Updated: 03-24-2019