When a loved one passes away, there are likely loose ends that need to be tied up. Some of these may have to do with the decedent’s finances. In most cases, the person’s estate is liable for covering those debts. Even if the estate is insolvent and can’t pay them, the decedent’s loved ones likely aren’t responsible for them.
There are several things that people who recently lost a loved one should know about those debts.
When is someone liable for their loved one’s debts?
In most cases, you’re only responsible for paying your deceased loved one’s debts if you were a co-signer or joint account holder. Unless one of those applies, you should direct creditors to contact the estate administrator for payment.
There are times when unscrupulous debt collectors may try to get family members to pay off an account even when that individual isn’t responsible. It’s illegal for them to do that, so never give out your own financial or personal information if they contact you.
How are a decedent’s debts paid?
The estate administrator is responsible for paying off debts in accordance with applicable laws. They can do this by drawing cash from the estate or liquidating the estate’s assets. Once the debts are paid, including those from creditors, taxes and other valid sources, the remainder of the estate is distributed according to the decedent’s wishes. If there’s not enough in the estate to pay the debts, they usually have to be written off.
Dealing with the estate administration process can be complicated. Working with someone who can assist with the process may make it less stressful for the administrator.