What Happens to My Parent’s Debts at Their Death?

Parents often hope to pass assets on to their children, but medical bills, mortgages, and other expenses can cause many older people to incur substantial financial obligations before their death. If they pass away before such liabilities are paid, their children will often have to handle their debts. As such, many people wonder what happens to their parent’s debts after their death. If you have questions about what will happen to your parent’s debts if they pass away, or any other estate planning issue, it is prudent to speak to an experienced estate planning attorney as soon as possible.

Responsibility for a Parent’s Debt Following Their Death

While the laws vary from state to state, people, generally, are not personally liable for their parent’s debts after their death. For example, if a person had outstanding credit card bills, a mortgage, or loans, their children have no obligation to pay them unless they bear individual liability for such debts. In other words, if a parent and child were joint mortgagors or credit card holders, the child would bear responsibility for the debt acquired under the account regardless of whether the parent passed away. Some states allow creditors to impose liability on adult children for their deceased parent’s medical debts, however, that is usually if they signed documents accepting responsibility for the debt.

If you do not bear personal responsibility for your parent’s debts, it means, among other things, that you can prevent your parent’s creditors from contacting you. In many cases, you must request in writing that creditors cease and desist their collection efforts.

In most cases, though, debts do not go away simply because a person dies. Instead, the debt becomes a part of the estate. Typically, after a person’s death, their estate will be subject to probate or administration. During this process, all of a deceased person’s assets and liabilities are usually identified and collected. The administrator of the estate, which may be a person identified in the deceased person’s will or trust, may then have to take steps to notify any creditors. Such steps may include publishing notices in local newspapers or contacting the creditors individually.

After sufficient time has passed, any estate assets may be liquidated and used to pay outstanding debts. If there are assets left over after the debts of the estate have been paid, they will be disbursed as dictated by the terms of the deceased person’s will or trust, or if they did not have a valid will or trust, in accordance with the intestacy laws of the state where the deceased person lived.

Talk to an Experienced Estate Planning Attorney Today

When people contemplate how their parent’s estate will be handled after their death, they typically think about the distribution of assets, but debts must be dealt with as well. If you would like to discuss what happens to your parent’s debts at their death, contact Wilson Law PLC at 866-603-5976 or fill out our contact form. We can answer your questions and advise you of your options for protecting your rights and your parents’ estate.