Who is Responsible for a Deceased Relative’s Debt?

A person sitting on the floor with paperwork and a calculator holding credit cards

When a loved one passes away, it can be difficult to navigate the legal and financial implications of their death. One such issue that many must consider is whether the deceased's debt will be passed on to family members. Should you be worried if a family member passed away with a lot of debt?

In general, any debts held by the deceased relative or decedent will be the responsibility of the decedent’s estate. Technically, the assets they owned are passed to their estate, and debt is a type of ownable asset, even though no one wants to own it. Secured debt, like most car loans, for example, might still be owed to the creditor after the original owner of the debt passes away.

In such a case, assets from the estate would be used – or sold off – to pay as much of that secured debt and others like it before any assets are distributed to inheritors and beneficiaries. In other words, you might not owe anything to repay some of your deceased relative’s debts, but those debts can still impact your financial situation by cutting into what you would have inherited.

What Happens to Shared Debts?

A debt is shared if two or more people are responsible for it. When someone passes away in possession of a shared debt, the people who are still alive will assume responsibility for their portion of that debt. In this way, you could become responsible for some of a late loved one’s debts.

For example, if your loved one purchased a vehicle and your name was on the title, too, then you are technically a co-owner of the vehicle and have the responsibility to pay for it. If they pass away, then the responsibility to pay for the vehicle will be passed to you. The same is true of financial accounts, credit cards, and other assets that you share with a loved one, so it is important to know what your name is written on.

Can Debt Collectors Make Me Pay a Decedent’s Debt?

When a loved one passes away, you might be contacted by a debt collector who tells you to pay their debts. Don’t rush to pay them, though, because that debt very well might not be your responsibility at all. As discussed above, most of the time, debts don’t pass from a relative unless there are specific reasons for it to happen, like debt on shared property.

The truth is that debt collectors can ask you to pay their debt whether it is your responsibility or not. Before you agree to pay anything – especially before you sign anything – ask for proof that the debt is yours. When in doubt or if the debt amount is significant, you should speak with an experienced attorney for more information about how debt can be inherited and if the debt in question is actually yours to repay.

For questions about inherited debt and other financial concerns with estate planning in Florida, dial (239) 908-4930 to connect with an estate planning attorney from Lusk, Drasites & Tolisano. We would be happy to help you figure out this situation.