Continuing The Tradition Of EXCEEDING EXPECTATIONS

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If your parents die in debt, do you have to pay?

On Behalf of | Apr 3, 2022 | Estate Administration |

When your parents passed away, you knew that they would have assets to leave you. You also knew that they had named you as the estate executor. You are the one who is in charge of gathering up those assets, reading the will, talking to the other family members and then distributing the assets properly.

What you didn’t know is that your parents also had a lot of debt. They didn’t talk about this and it was something of an uncomfortable subject, so you didn’t realize nearly how bad it was. As soon as you start going through the finances, you realize that a lot of this debt is unpaid and you may not be able to pay it all back. Are you going to have to take out your own loans or dip into your savings to make these payments on your parents’ behalf?

You just pay what the estate can handle

As the executor, this is a problem that you’re going to have to solve, but only in the sense that you need to get the money out of the estate to pay back that debt. You don’t have to do anything on your own to pay it off out of money that you earned unless there’s a scenario where you co-signed on a loan. You’re not obligated to spend your own money on your parents’ debts, but you do need to spend the money from the estate on those debts, which can mean it runs out before you’re able to distribute it in accordance with the will.

A situation like this can get very complicated, especially if you didn’t talk to your parents much about their plan in advance. Make sure you understand all of your obligations and the legal steps to take to protect your rights.