If my parents die, and they are in debt, will I be stuck with that debt?

Question

They have no insurance, and are thousands of dollars in debt. When they pass away, what will happen to that debt? Will I have to pay it?

Answer 1

Most parents work hard throughout their lives to make sure that when they pass away, their children will be left with enough money to support themselves. They purchase life insurance plans, they store adequate money for retirement and they make sure that their debts are paid long before it can become an issue. Some parents, however, fail to meet this goal, and pass on with more debts than their estate can conceivably cover. When this happens, their children are often concerned about the possibility of inheriting their parent's debts.

Thankfully, the short answer is, no, you cannot inherit a debt, as long as you have no stake in that debt. For example, if your mother failed to pay her credit card debt, and you were not listed as a cardholder on that account, you would not be responsible for paying that debt. If, however, the credit card was held jointly between you and your mother, you would be responsible for taking care of that debt. The same goes for joint checking and savings accounts that are overdrawn or mortgages that are taken out in both your name and your parent's name. However, as long as your name isn't tied to a debt, you aren't responsible.

When a person passes on, his or her "estate" is managed by the executor of his or her will. If no executor was named by the deceased, then the probate court will appoint an executor to distribute money and assets. However, the beneficiaries in the will are second to any outstanding debts owed by the deceased. None of the beneficiaries will see any money until those debts have been settled.

In that way, it may seem as though you are inheriting your parents' debts, but it isn't money taken out of your pocket; rather, it's money that you will never see.

One way that people try to circumvent this process is by distributing their assets - such as their house, their stocks and bonds and any money they have stored away - before they pass on. They believe that, by doing this, they can avoid paying creditors can can still leave money and assets to their children. Realize, however, that creditors have the right to legally petition to have those monetary gifts reversed after the debtor passes on. Even if you receive money or assets before your parents die, you might have them taken away by creditors afterward.


That will answer your question!

Answer 2

No. Parents can't leave their debts to you. In fact, they can't even leave their debts to their spouse.

Typically a will controls financial affairs after a person's death. A will distributes assets, not debts. But, before any money can be distributed to heirs, all the debts must be paid. So enough assets are sold to pay for any debts that remain. Only after the debts are paid will the remaining assets be distributed among the beneficiaries of the will.

Answer 3

Unless you are listed on any of the accounts as a debtor, you will not be stuck with the debt. If there is a legal claim to the estate, you will get whatever is left over after the debts are paid off, that is if there is anything left.

Answer 4

NO. No, No, No.

All assets and debts are handled by the estate, prior to it being probated. If the estate is "negative", all assets are liquidated (auctioned, sold, etc) and the debts are paid as much as possible.

You dont inherit the debt-- but you also dont inherit any of the valuables such as a house, cars, jewelery-- ANYTHING.

Answer 5

If your name is on any of the loan papers or credit cards you can now look forward to the collection agencies hounding you. Make sure your parents have not used your name on any of their debt or loan papers.

If you are not listed as anything on any of them then you are free from paying for their debt. Even some companies will hound you after their death but if your name is not on anything then you have leverage to throw in their faces to leave you alone.

Answer 6

The estate will be liquidated and the creditors will be paid first and if there is anything left, it will be divided among the beneficiaries.

Unfortunately, the beneficiaries are responsible for the debt of the estate if the debt outweighs the assets.

Answer 7

Unless you are listed legally on any of their documents ( mtgs, loans, etc) no there isn't anything that anyone could come after you for. Legally they would seek remedy though the courts by going after their estate but beyond that, once the money is gone..........it's gone.

Answer 8

properly, "stable information," you will no longer would desire to be caught together with his debt. the only factor you will would desire to pay for is, in certainty, the funeral. till you intend to stay interior the homestead which you reside in. then you definately will would desire to confirm that he transfers each and every thing below your call, this style you could dodge all of that mess after he dies. it is a perplexing factor to handle, yet once you're clever approximately it, you would be okay.

Answer 9

Not unless you are somehow claimed on the debt, no.

Answer 10

No.

I suggest you buy life insurance for both of them and become a wealthy person after their death.