Do You Have To Pay A Deceased Family Member’s Debts?
The short answer is no, you do not have to pay the debts that a family member of yours owed when he or she died, but if it were that simple, then why do deceased people’s creditors pursue the decedents’ relatives so relentlessly? Sometimes it is because the creditors are so used to getting away with unfair debt collection practices that they feel emboldened to try, in the hopes of getting money out of surviving relatives who do not know their legal rights well enough not to pay and who are too distracted by grief and probate proceedings to figure out that they don’t have to pay, but that does not account for all debt collection efforts. Repaying debts is part of the probate process, but there are rules about which assets you must use to settle the debts and which ones are off limits. The best way to ensure that you are being fair to creditors without letting them overstep their boundaries when it comes to collecting debts for which the original borrower has died, contact an Orlando probate lawyer.
How Debt Collections Apply to Probate and Non-Probate Assets
When someone dies, the person’s property becomes part of his or her estate, and the court distributes the estate at the end of a legal process called probate. The estate must pay the decedent’s outstanding debts, even if that means selling assets to pay creditors or spending the entire estate on debt repayment, leaving nothing for the beneficiaries of the decedent’s will to inherit. This is why the personal representative must contact known creditors and publish a notice to alert creditors that the personal representative doesn’t know that the estate is open. It is also why estate planning lawyers counsel their clients to keep some of their property out of probate, in non-probate assets like trusts, life insurance policies, and transfer on death (TOD) bank accounts. Creditors cannot demand that you use non-probate assets to repay a deceased person’s debts.
It Makes a Difference Whether the Debt Is Secured or Unsecured
Whether the money that the creditor is claiming is part of the estate or a non-probate asset is one factor that influences debt collections from the estates of deceased people. Another factor is whether the debt is secured or unsecured. A secured loan is attached to a collateral asset, such as a car for an auto loan or a house for a mortgage loan. If the estate cannot pay the outstanding loan balance, the creditor repossesses the collateral asset. If the debt is unsecured, such as personal loans or credit card debt, the creditor cannot collect the debt if the estate cannot repay it.
Contact Gierach and Gierach About Repaying the Debts Owed by Deceased Relatives
A probate lawyer can help you navigate creditor claims against the estate of your recently deceased family member during probate. Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.
Source:
msn.com/en-us/money/personalfinance/my-mom-died-with-no-will-and-6-000-in-credit-card-debt-my-uncle-says-i-should-pay-the-debt-because-i-collected-her-life-insurance-what-do-i-do/ss-AA1Ulc0S?ocid=msedgntp&pc=ACTS&cvid=696a704e17264cbbbbca021938104f0a&ei=30#image=6
