It’s often overwhelming when a parent dies, having to deal with all their paperwork, bills, and determining whether there will have to be a probate filed or a trust administered. Children often worry also about their parent’s debts. A long illness and nursing home or hospital expense can quickly eat up a parent’s assets.
What if your parent passes away with not much other than debts? Are you liable? Can you be sued personally for their debt? Sometimes heirs even get phone calls or letters from creditors claiming that as the decedent’s heirs, they are liable for the parents’ debts.
Not so! Children are not responsible for paying their parent’s debts. The estate of the person who died is liable but if there is no money or assets in the estate, the creditors are out of luck.
When a person dies, his or her estate is reponsible for paying off the debts. If there is a probate because your parent passed away with a will or intestate without a will, creditors have 4 months to file a creditor’s claim. The administrator or executor will assess the assets and the debts and determine according to legal guidelines, the order in which the bills will be paid. If your parent had a trust, the trustee should make an effort to identify all creditors and pay them if there are trust assets. In either case, if there is no money in the probate estate or the trust estate, then the creditor won’t be paid. Creditors will have to write the debt off.
Similarly with credit cards, if your parent dies with credit card debt, you are not liable. The exception would be if you co-signed with your parent on the credit card application. So make sure if you are asked to pay debts of a parent, familiarize yourself with your rights.
For questions about your rights and obligations after a death, contact us for a free consultation.