What if they racked up $15K in credit card debt and borrowed against their 401K for a down payment on their house and I cannot sell the house for more than what is owed? Do I have to pay for it?
2006-10-30 10:11:44 · 9 answers · asked by Vianka 4 in Business & Finance ➔ Credit
I am the executor or executrix of the estate. Obviously I am not going to execute my parent!
2006-10-30 10:17:54 · update #1
The debt of your parents will be paid by the estate that you'll liquidate. You mentioned that they had a loan against the 401K. you don't have to repay that loan , since it will be treated as a disbursement from the 401K.
If the Liabilities are greater then the Assets, you will not be responsible for the shortfall.
2006-10-30 16:40:50 · answer #1 · answered by barbara w 2 · 0⤊ 0⤋
You are responsible to pay as much of the debts as you can from the assets of the estate. You are not personally responsible for debts that exceed the value of the assets. It may be worth the effort to consult an attorney to be sure the correct priority is given to each debt. I believe the attorney's fees are a legitimate expense of the estate. If I am correct, the attorney's fees will reduce the amount available to pay the debts instead of coming from you. The attorney should be able to tell you that much at no charge.
2006-10-30 19:46:33 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋
Personally, you are not. But, the estate is liable. You must pay the creditors out of the estate proceeds. That may involve selling real estate, cleaning out the deceased parents' bank account,etc....
But, if they owe 15K and the estate is only worth 10K, you are not responsible for the rest. The creditors just have to take it on the chin. Let the creditors know that the parent is deceased-you may have to show them proof. I wouldn't ignore them and assume they will not come after their money if the parent has a sizable estate.
2006-10-30 18:20:18 · answer #3 · answered by ontopofoldsmokie 6 · 0⤊ 0⤋
You do not have to pay their debts. Their estate has to pay the debts. The estate is the pool of money from their bank accounts, the sale of their house, etc. If the debts are greater than the estate, that's just too bad for the people who are trying to collect. The worst that can happen to you is that you will get no inheritance.
2006-10-30 18:23:16 · answer #4 · answered by Steven M 3 · 2⤊ 0⤋
The executor steps into the shoes of the deceased to handle their affairs, your not responsible for their debts, you responsibility is to clean up the bills. You do have a fiduicity responsibility to act prudently. This is not a responsiblity that should be taken lightly, typically you are entiled to renumeration for your time.
2006-10-30 18:22:40 · answer #5 · answered by roger w 2 · 1⤊ 0⤋
I really hope you mean you are executor of the estate and not executor of your parent.
2006-10-30 18:15:36 · answer #6 · answered by infernal_seamonkey 4 · 0⤊ 1⤋
If you are the executor? Yes you will now become resposible for their debt. That is why most people have life insureance, so when they pass, any debts will not be a burden on their families.
2006-10-30 18:15:04 · answer #7 · answered by ~*Kristen*~ 2 · 1⤊ 4⤋
no. you only have to pay what's in the estate
2006-10-30 18:16:20 · answer #8 · answered by mstrywmn 7 · 0⤊ 0⤋
I am afraid so.
2006-10-30 18:18:53 · answer #9 · answered by Anonymous · 0⤊ 4⤋