Are Heirs Responsible for Their Loved-One’s Debts?
Losing someone close to you is extremely difficult and overwhelming. It's even more stressful when you receive constant calls from creditors regarding the decedent's unpaid debts. Unfortunately, debts are not automatically wiped out when a person dies. With several post-death activities to handle, you may be confused about how to manage your loved one's debts following their passing.
At the Law Office of Robert L. Firth, our team has you covered in all probate and estate administration-related matters. Our trusted California probate attorney can inform you about what happens with the debts of someone when they pass away, guide you through the estate administration, and help you make intelligent decisions.
We're proud to serve clients across Cathedral City, Rancho Mirage, Palm Springs, Palm Desert, Desert Hot Springs, and throughout the Coachella Valley, California.
Do Debts Go Away After Passing Away?
No. When a person dies, their debts do not go away. The creditor will take necessary actions to recover the outstanding amounts owed, including contacting the decedent's heirs or executor. Under the law, the deceased person's estate will be responsible for their debts.
As a result, debts are often paid during probate or estate administration before the remaining assets are transferred to beneficiaries. An experienced California estate planning lawyer can assist you in the estate administration process and tell you how debts are repaid during probate.
Estate Administration in California
Estate administration is a court-supervised process usually needed to settle a deceased person's estate and final affairs. Essentially, the probate court will appoint an executor or administrator (if the person died intestate) to oversee the estate administration process.
In addition, the executor will gather and assess the estate's assets and property, pay taxes and debts, and determine heirs and beneficiaries. However, the decedent's estate will be administered according to the provisions and instructions of the will or other applicable state laws.
Responsibilities of the Executor
Here are some duties and responsibilities of an executor or administrator – once they're appointed by the probate court:
Collect and evaluate all probate assets and property.
Determine the true value of real property, assets, and other personal belongings.
Locate important documents, including property titles, retirement plans, account statements, and life insurance policies.
Notify all interested parties and entities about the person's death.
Prepare an inventory of all estate assets and property.
Collect all benefits, interests, rents, and other money owed to the deceased person.
Determine and settle all unpaid debts and known creditors.
File income and federal estate tax returns
Transfer the remaining assets to rightful beneficiaries and heirs.
A reliable lawyer can direct you through the probate and estate administration process and outline a solid plan to repay your deceased loved one's outstanding debts.
Who Is Responsible for a Deceased Relative's Debts?
In California, the deceased person's estate will pay back any unpaid debts following the person's demise. Then, the administrator or executor will take out the decedent's assets and funds to repay outstanding debts in an established order.
Generally, beneficiaries and heirs will only receive their inheritance after all debts and taxes have been settled. Conversely, if the available funds and assets are unable to cover all outstanding debts, creditors may negotiate partial payments or take further legal action against the estate.
What to Do if a Debt Collector Harasses the Relative of the Deceased Debtor
It is a violation of federal law for debt collectors to harass the decedent's relatives to recover unpaid debts. If you're being harassed by a creditor or debt collector concerning your deceased family member's debts, you should document the creditor harassment and inform your attorney. Your lawyer can help protect your rights and seek relief from the disobedient creditor.
Learn About Your Legal Role After a Loved One's Passing
When a loved one dies, there are various post-death activities you need to sort out. However, this doesn't involve paying the decedent's debts using your personal money. At the Law Office of Robert L. Firth, our reliable attorneys have the compassion to guide clients through the complex procedures involved in probate and estate administration.
We understand how hard these times can be. That's why we can educate you about your roles when a loved one dies, assess the decedent's outstanding debts, and craft a strategic plan for debt repayment. Our experienced legal team will collaborate with the executor to administer your loved one's estate efficiently and protect you from possible creditor harassment.
Contact us at the Law Office of Robert L. Firth today to arrange an initial consultation with dedicated probate lawyers. Our skilled attorneys can provide the assistance you need to pay debts and settle your deceased loved one's estate and final affairs. We're proud to serve clients across Cathedral City, Rancho Mirage, Palm Springs, Palm Desert, Desert Hot Springs, and throughout the Coachella Valley, California.