Do You Inherit Your Parents' Debt? Spouse's Debt?
Updated: Apr 21
If you inherit money or property from a loved one after his or her death, do you also inherit his or her debt? Who pays the debt if there are no estate assets?
The general rule is that family members and beneficiaries are not personally liable for a loved one’s debts.
In this day and age, it’s not uncommon for our loved ones to leave credit card debt, a mortgage, an automobile loan, or other consumer debt when they pass away. When a person dies, his beneficiaries do not generally become responsible for his debts- his estate becomes responsible for his debts. That means family members and beneficiaries are not personally liable for the debts of their loved ones. However, the debts may have to be paid from money in the estate before any money can be distributed to family members or other beneficiaries.
Probate is the process of identifying estate assets, paying valid creditors’ claims (debts), and distributing the remaining assets to the appropriate beneficiaries. To be entitled to payment for debt, each individual creditor must generally make a formal claim against the decedent’s estate within the specific timeframe provided by Florida or Alabama law. Assessing and paying creditors’ claims is part of the probate process.
Do You Inherit Your Parents' Debt?
Generally, no. If your parent dies, his or her estate becomes responsible for his or her debts, and creditors must make a formal claim against the estate to get paid. If the claim is a valid claim made within the timeframe allowed by Florida or Alabama law, estate funds are generally used to pay the claim, when available.
However, under certain circumstances, a child may be responsible for a parent’s debt if the child co-signed the obligation or was responsible for resolving the estate and did not comply with Florida or Alabama probate laws.
Do You Inherit Your Spouse's Debt?
Generally, no. For the most part, your spouse’s estate if responsible for your spouse’s debts, and creditors must make a formal claim against the estate to get paid. If the claim is a valid claim made within the timeframe allowed by Florida or Alabama law, estate funds are generally used to pay the claim, when available.
However, under certain circumstances, a spouse may be responsible for their spouse’s debt if the spouses entered into the debt together, or if the surviving spouse co-signed the obligation or was responsible for resolving the estate and did not comply with Florida or Alabama probate laws.
What If There Are No Estate Assets to Pay the Debts?
Sometimes our loved ones die with no assets- no money in bank accounts, no equity in a home, etc. If an estate does not have enough assets to pay all of the decedent’s debts, the creditors are not entitled to payment from anyone else, including relatives, spouses, or other beneficiaries. The debts simply go unpaid.
What If Debt Collectors Are Calling Me to Collect a Spouse's or Relative's Debt?
If you receive letters or phone calls about a spouse's or relative’s debt, give the creditor/debt collector the contact information for the decedent’s personal representative. You have a right to ask the debt collector to stop calling you. If the debt collector does not honor your request to stop calling, you may have the right to take legal action and should contact an attorney for help.
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