If a person dies with outstanding debts, does the family inherit the debt?

Question

If a person does not have a spouse, or children, are their siblings responsible for their debt when the person dies?

Answer 1

Unless contractually accepted by others, the debts of an unmarried adult are his or hers alone. One is generally responsible for the necessary expenses of one's spouse, and parents are generally responsible for the expenses of children under the age of 21.

In other cases, neither a senior nor a junior nor surviving family members are responsible for the debts of other family members unless a guarantee of payment was given or one has otherwise undertaken that responsibility.

However, there may be other factors that create a different result in unusual circumstances. For example, if a family member who is authorized to use a senior's credit cards incurs debts on the cards for purchases or services benefiting the card user with knowledge that the senior has no funds with which to repay the expenditures, the credit card issuer may be able to look to the person benefiting from the expenditure.

Also, if the reason the debtor has no assets is that he or she gave assets away within a short time prior to the assertion of a claim by a creditor, a creditor or creditors of the estate may be able to look to the recipient of those assets for repayment.

As for what happens to the debts of a person who dies without assets to pay them: The executor of a debtor's will or the administrator of the debtor's estate, where there was no will, is responsible for identifying any assets of the debtor that may be available to satisfy the creditors' claims. Any assets that do exist would be sold to pay the funeral expenses; executor/administrator's fees and other expenses of administering the estate; creditors whose interests are secured by property of the debtor, such as a car loan or mortgage on a house or who otherwise have a preference above general creditors; taxes on property of the decedent prior to death; income tax owed to the Internal Revenue Service; and any general creditors.

If no family member steps forward to administer the debtor's estate, any creditor can petition to be appointed administrator of the estate for the purpose of gathering any assets that may be applied toward the debts owed.

If there are truly no assets available to satisfy the debts, the creditors will be out of luck. How far the creditors are willing to go to satisfy themselves that there are no assets that should be applied toward the debt varies by circumstances and creditors' policies.

S. Jeanne Hall,
Fulton Rowe & Hart,
New York

Answer 2

Not in most states- but the estate does. Any remaining assets in a person's estate may be used to satisfy debt if a creditor's claim is filed. If there is a trust, then the trustee(s) will have to make sure the debts are satisfied. In a probate proceeding ( a court-supervised judicial proceeding) creditors are notified of the person's death and given a certain amount of time to file a claim.

So while the family doesn't personally inherit debt, they may not get anything in the form of inheritance either.

Answer 3

No although the guy it particularly is owed ought to document the debt with the resources and at the same time as any insurance payouts are in probate, the debt must be taken out previously the family members receives the money from an inheritance or insurance coverage.

Answer 4

No, only the person's estate is liable for the debt with the exception of debt in the form of a loan that was co-signed for. The individual's estate will be sold at auction to cover as much of the debt as possible, the rest will be written off as a loss. Any co-signer to a loan will assume control of debt from the loan.

Answer 5

Not usually, unless there is property or money to be distributed. Then the debts have to be settled first before any monies or property can be distributed to anyone. If there is no money, or proprty left in the persons estate and there is no next of kin that can be held accountable then the debts are simply written off as a loss.

Answer 6

Try the site below, make sure to change the location/state in which you reside. Hope this helps. If you need an attorney/law firm, try the last site and watch the movie.