Saturday, May 28, 2011
Debts of the Decedent
Unfortunately, when a family member dies, his or her survivors must not only deal with grief, but often, with debt collectors seeking to collect from the estate of the decedent. This often leads to panic on the part of the surviving family members, especially a spouse, who may be concerned about having enough assets to survive.
In general, family members are not responsible for a decedent's debts, but this does not necessarily stop the collection agencies from trying to collect.
An estate should have a personal representative, known as an executor if there is a will and an administrator if there is no will. One of the main duties of the estate's personal representative is to marshal all of the assets of the estate, and pay any just debts of the decedent. However, if the estate does not have sufficient funds to pay creditors, the debt will go unpaid and without recourse against the survivors.
The exception to this rule relates to debts that were jointly held. For example, if a credit card was shared between the decedent and his or her spouse, or another family member, then even if the estate of the decedent does not have sufficient funds to pay the debt, the surviving spouse or family member who was “on the card” may be personally responsible.
To be clear, we used the example of a credit card, but the rule applies to any just debts that were jointly held between the decedent and the surviving family member; the surviving spouse or family member may be personally responsible for a jointly held debt.
It is critical that the personal representative make sure that just debts are paid, while other interests are protected. Scammers are out there and will actively seek out surviving relatives of a recently deceased person, and then create debts where there are none, in an effort to get an unjust payment. The executor/administrator must be sure to not provide personal information to debt collectors unless they are certain that the debt collector is legitimate.
If one of your loved ones has died, Maroney Associates invites you to contact us, so as to answer any and all questions you may have about winding up the estate, and taking care of any just debts owed by the decedent.