A person’s bills don’t just go away when they die. Instead, creditors often try to get the money they’re due. It is, therefore, critical that loved ones and an estate’s administrator understand who’s responsible for paying a deceased individual’s bills.
Typically, the deceased’s estate is responsible for having to pay for creditor claims. This is only possible up to the value of the estate. Payments to creditors must be made before beneficiaries receive their inheritance, and it’s sometimes necessary to liquidate the estate’s assets to pay off outstanding accounts.
Certain secured debts, such as car loans or mortgages, may not need to be paid at all. Instead, the asset that’s being used to secure the debt can potentially be returned to the creditor in lieu of the estate having to pay off the account.
When are loved ones responsible for a decedent’s debts?
There are very limited circumstances in which a loved one will be responsible for a decedent’s bills. In most cases, this is because the loved one was a joint account holder or co-signer for the account. When that’s the case, they will be responsible for making the payments.
Texas is a community property state, so the spouse of the person who died may have to liquidate jointly-owned assets to pay for the debts of their deceased spouse. This can include things like real estate or financial accounts that have both spouses named on them.
When contact is made about a deceased loved one’s debts
Someone who’s contacted by a creditor for payment on a deceased loved one’s account should direct the creditor to the estate administrator. They shouldn’t provide any personal information, including financial information, to the creditor.
The estate administration process can be complex, especially if there are multiple creditors demanding payment. Seeking assistance with handling the duties of the estate can be beneficial for any administrator so that they can better ensure that they do what’s necessary to pay creditors and get beneficiaries what they’re owed.
