Are Heirs Responsible for Their Loved-One’s Debts?
When you’re faced with the task of being the executor of a loved one’s estate, you’ll likely be forced to grapple with several issues and questions you’re unprepared for. Specifically, many executors want to know what happens to the debts of someone when they pass away and whether they’ll be responsible for paying them. This is a complex question to address, and any time you’re administering the estate of someone else, you should consult with a probate attorney to ensure you’re doing everything correctly.
If you’d like help with this or any aspect of estate or probate administration and are in the Dayton, Ohio, area, including Warren, Greene County, Clark County, Miamisburg, Butler County, and Preble County, give us a call at StachlerHarmon Attorneys at Law.
Do Debts Go Away After Passing Away?
None of us know exactly when our time will come, and we may not be able to tie up all the loose ends we’d like before we pass. Because of this, it’s often the case that people will die without having paid off all their debts, and these must be dealt with. Debts do not automatically disappear when someone passes away, but they are treated differently than if they were still alive. Essentially, the deceased’s assets and debts will both pass into their estate and have to be dealt with during the legal process of probate. However, since each person’s estate is different, the exact way the debts are addressed will vary.
Estate Administration
In most cases, an individual will name an executor in their will who is then responsible for estate administration. If there is no one assigned to this role, a judge can appoint an administrator, and this is typically a surviving spouse or family member. Regardless, their responsibilities will be the same:
First, the administrator will file a petition with the county the individual died in to begin probate.
Then, you must notify all interested parties that the estate is now in probate, including all creditors and named beneficiaries. This is often done through a public notice and should give enough time for a party to submit a claim on the estate.
Now, you must locate, inventory, and appraise (if necessary) before any asset distribution can be made. It’s essential to determine the real value of the estate as a whole so that any legitimate creditors can be paid.
The estate executor must then pay any past-due taxes and debt that the deceased left behind using the money in the estate.
Only after taxes and debts have been paid can the executor then distribute the remaining assets to the beneficiaries.
It’s not uncommon for this entire process to take months to complete, and in some cases, it can take over a year. You may be required to give potential creditors up to six months to respond to your notice before you’re able to move on with the estate administration.
Because you’ll also be dealing with the emotional pain and grief that comes with losing a close family member, many estate executors find it helpful to work with an attorney, or at the very least, locate a reputable attorney to consult with periodically about the probate process.
Who Is Responsible for a Deceased Relative’s Debts?
Paying off debts and taxes from a deceased family member is not the personal responsibility of the executor or the surviving family members. Instead, these debts should be paid using the funds in the estate itself. In general, no one else can be held legally accountable for the debts of another person unless they co-own assets with someone else, are a cosigner for someone else, or are the surviving spouse and are required to by community property laws. If the deceased’s estate is not large enough to pay all debts, then they will typically go unpaid.
What to Do if a Debt Collector Harasses the Relative of the Deceased Debtor
Debt collectors are allowed to make calls to collect on past-due debt, and this is true of debt for deceased individuals as well, but there are limits on what they can do. They are able to contact a surviving spouse or child once to determine who the personal representative or estate administrator is, and you are permitted to give them this information. In most cases, they are prohibited from contacting you after this unless you agree to it. They are also not allowed to pressure you or make you believe you are responsible for paying the debt. If this does happen, you should contact your attorney right away to take steps to make this stop.
Protect Your Rights After Your Loved One’s Passing
If you're in the Dayton, Ohio, area and want to learn more about your role as an estate administrator as it applies to a loved one’s debt, reach out to us at StachlerHarmon Attorneys at Law.