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Will I have to pay my deceased parent’s debt?

On Behalf of | Aug 11, 2022 | Estate Planning

When your mother or father passes away, it’s reasonable to wonder if you’re going to have to pay down their debts. The simple answer is that you usually do not have to worry about assuming your parents’ debts. In fact, the creditors may come after the estate, but debts don’t pass on to others unless they are cosigned or share in the debt in some way.

That being said, there are times when paying certain debts may be beneficial to you. For example, if your mom owns a home that has $16,000 left before it is paid off, assuming the mortgage and paying off the remaining debt wouldn’t be a bad idea at all. Your alternative option would be to sell the property, which may or may not be your preference.

What do you do with your loved one’s debts?

The executor for the estate should contact all creditors or make it clear that your parent has died so creditors can reach out to them. Once they’re all informed, the accounts should be closed, and the creditors should go to the probate court to get the final debt handled.

Generally, when there is enough to pay down the debts in the estate, the debts will be paid. However, if there isn’t enough money or there aren’t enough assets, then certain debts may go unpaid.

The creditors may reach out to you to ask you to pay certain debts, but you’re not obligated to do so unless you are named on the debt. For example, if you have a joint account with a parent, you’ll be obligated to pay debts incurred on that account. If you are just an authorized user, the same is not true.

Unpaid medical debt could become your problem in some cases, but not always. This is something that you’ll want to address with the attorney as you work on resolving the estate.

The short answer to this question is that there are different circumstances that may affect you and influence which debts you have to pay, but most debts do not pass from parents onto their children.