What is my legal obligation to settle my parents debts when they die?
bigdawg46 asked:
I am the adult son of free-spending, 74-year-old parents who are likely to leave considerable debt upon their deaths. If they were to die tomorrow, what is my legal obligation to settle their debts if their estate has negative net worth?
I am the adult son of free-spending, 74-year-old parents who are likely to leave considerable debt upon their deaths. If they were to die tomorrow, what is my legal obligation to settle their debts if their estate has negative net worth?
June 27th, 2009 at 10:38 am
No. You are required to settle their debts out of their estate. If there’s no money left, there’s no money left.
June 28th, 2009 at 12:51 am
None, its not your problem. The credit card companies will probably start calling you, but tell them to stop harassing you and that its their own fault for giving an old person a credit card when they are living on a fixed income.
July 2nd, 2009 at 9:32 am
None, unless you own homes or property in both of your names.
If they own a home or other property, it would need to be sold to settle debts, so there will be some work involved for you.
Sorry about that. Hopefully, your parents are enjoying their senior years!
July 3rd, 2009 at 1:01 pm
Zero.
If, and not wishing it on your parents here, just an example, they both were to pass over tomorrow? Their debts are now part of the probate process. Their heirs will open a probate action for their estate, and all their creditors have the right to file a claim against their remaining assets. Any that are validated are paid out of the assets, and the remaining assets distributed to the heirs.
If there’s no assets, they don’t get paid. Period. NEVER co-sign anything for your parents at this point, and don’t have your name on any of the deeds of property as a co-owner.
Just a word to the wise.
And, unfortunately, the creditors know all this, but they still get in touch with the heirs and try to harass them into paying the dead guy’s bills. Nasty practice! Tell them he or she died, tell them you’re happy to send them a copy of the death certificate, and then tell them to pound sand.
July 4th, 2009 at 1:20 am
That depends. If you inherit their estate, and the debts, you will have to sell the estate to pay as much of the debts as possible, but if you can’t afford to pay all of it, then you can’t afford it, and I believe the debt is just wiped beyond what you can afford from what else you were left.
Tell your parents though that you don’t want to be left with their debts, and they need to stop spending as much.
July 4th, 2009 at 3:15 am
If you are the executor of their will, you are legally obligated to settle all of their debts, file their last income tax returns, etc.
July 7th, 2009 at 3:08 am
I am answering this from Canada, but if their estate really does have no assets, then you don’t have to settle thier debts. There are certain caveats to this statement though; ie. if they transferred a benefit to you without consideration prior to death etc.
Simply put, don’t probate the estate when they pass away and don’t cosign any loan obligations
July 8th, 2009 at 11:10 am
Not your problem. All debts will paid from money from their estate, if it runs out, it runs out.
July 11th, 2009 at 2:09 am
Any debts owed will come out of the estate that your parents left- If it wont cover the debts, that is not your fault . You are not responsible for their debts. Only if you co-signed for any of their debt will you be responsible for it. Don’t worry!
July 13th, 2009 at 6:09 pm
You have no liability for their debts. The estate would be settled, paying off debts that are outstanding. All funds would be taken from the estate. However, there is a time that a lender could go after you.
For example, let’s your parents hada limited time remaining. They took out a personal loan, and gave the proceeds to you, They died shortly after that. That is called a “gift in contemplation of death.” You would have to pay back the money.