My condolences and best wishes to your wife.
True, they can't go for the insurance policy but that won't stop them from trying and yes they will flat out lie to try to get their claim paid. Your wife will get collection calls, both my brother and I did and I bet at some point she will be told they are going to do something dastardly to her credit if she doesn't cough up. As long as she follows the established payment order she has nothing to fear, even if it turns out there is no money to pay them (very likely). The best advice our attorney gave us was to firmly tell whoever it was that they needed to file a claim IN WRITING against the estate with the probate court and wait a year like everyone else. Then hang up. Do not accept offers to settle early for a reduced amount!
Once the year is up, she can negotiate settlements (if there's anything to settle with). If there isn't, they are S.O.L. and no matter what they say, they cannot file a claim against your wife UNLESS! and this is very important! she breaks the established order of payment.
It goes like this: administrative costs come first. This includes funeral expenses, attorney fees (are you surprised?), probate court costs and the executor's fees. Yes, she can get paid for doing this but she needs to get the probate judge's approval before writing herself any checks. All these hold roughly equal weight.
Second is the creditors, and they have a pecking order. Taxes of any sort are first (are you surprised?), then the creditors. Secured creditors come right behind the tax man since they already 'own' an asset (that's where the car lien comes in). Then in last place is the unsecured creditors. By the end of the year, they will usually settle for a much lower percentage (again if there's anything to pay with).
Third is the beneficiaries (if any). They get the picked over bones.
If your wife pays anything out of order, she can be held personally liable! Believe me, she has to watch her P's and Q's on this.
As small as this estate is, I would recommend that instead of an attorney she consult directly with the probate court. Also, my advice again as a non-attorney: don't give ANYONE (including herself) a dime until she gets the go ahead from the probate court. Also, she needs to keep good records.
One other thought: unless the will provides specifically for it, an executor cannot sell estate assets without probate court approval. Anything of reasonable value (good jewelry, cars, large appliances etc) need to be inventoried. The probate court will probably give the go ahead to sell that type stuff (except the car with the lien) but I wouldn't do it before they say OK. That money will need to go into an escrow account where it will sit for a year until the creditor claims all come in. again, since this is such a small estate, probably what will happen is she will get a couple of nasty phone calls, maybe a letter or two, then at the end of the year there will be no creditor claims. The cost/benefit ratio for the court fees etc is not in their favor on such small numbers.
