Handling the Debts of a Deceased Loved One
The passing of a parent or other loved one is a difficult time. Not only is it an emotionally trying period of your life, but it will also pose some logistical challenges that you must overcome.
One of the more complicated aspects of managing the estate of a deceased loved one is paying off all of that person’s debts. Once you have determined how much your loved one owed and to which creditors, the question becomes how to pay off these debts.
Paying the debts
Although you may have inherited some money or assets from the estate, it’s important to note that paying off estate debts takes precedent over passing assets down to heirs. Your loved one’s debts must be paid with the estate property left at their death. You will not inherit the debts yourself, so the burden for paying the debt technically is not on you, but on the estate.
Therefore, these debts must be paid before you start handing out inheritances. Depending on the state of debt your loved one left behind, this could start to eat into inheritance money, but only if there is a significant amount of debt in the estate.
There is one scenario in which you could inherit some of the debt from the estate. If, for example, you inherit property that is collateral for a loan, such as a car that isn’t fully paid off or a house that still has a mortgage, that debt comes with that piece of property. You would be responsible for continuing to make those car or mortgage payments as the new owner of the property if you wanted to keep the car or the house.
To get further guidance on how to handle estate debts when a loved one passes away, speak with an experienced Tampa estate planning attorney at BaumannKangas Estate Law.