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Do you have to pay your parents’ debts?

On Behalf of | Mar 30, 2022 | Estate Planning

Your parents passed away, and you discovered that they had a lot of debt. You knew nothing about this before, and you certainly hadn’t co-signed on any of these loans. You believe they were financial mistakes.

But it’s too late to correct those mistakes. The debt is still owed. Is this going to cause a problem for you and the other beneficiaries? Are you going to have to pay off debt that you discovered in your parents’ estate?

Those payments are also the responsibility of the estate

You may technically have to write out the check to pay off the debt if you are the estate executor, but you don’t have to pay with your own money. Instead, the responsibility falls on your parents’ estate. The assets contained within that estate are supposed to be used to pay off the debts that are owed.

You may still feel like this is costing you a lot of money. Say your parents had $300,000 that you expected to inherit, but they have half a million dollars in debt. By the time you get done paying off as much as you can, there’s nothing left for you to inherit. You’re not losing the personal money that you earned, which is good, but you’re also not going to get the things that you expected.

Working through a complicated process

This is just one of the ways that the estate administration and probate process can grow very complicated. If you run into some of these types of hurdles and you’re not sure what to do, it’s important to understand all of your legal options and obligations.