What happens to my parents debt after they die?
What happens to my parents' debt after they die?
When a married couple dies with debt, the rules can be complex about who is responsible for paying it back. In a friendly tone: When a married couple dies with debt, the rules can be complex about who is responsible for paying it back.
Estate
The reason for this is that the debt belongs to both spouses equally, but after death, one spouse may have no assets available to repay the amount owed, which leaves only the estate of the other spouse to pay off their half of the debt.
Two ways that this can happen
1. In community property states, all debts incurred during marriage are considered joint debts and legally belong to both spouses.
2. Even in non-community property states, if there is no prenuptial agreement in place then the law will consider both spouses equally liable for any debts acquired during the marriage.
Debt Division
The issue of debt division usually only becomes a problem when one spouse dies with significant debt while leaving behind little or nothing in assets to pay off their share of the debt. This may cause issues if there are children from another relationship who are entitled to part of their deceased parent's estate but also have a claim on their parent's portion of the marital debt.
What happens to your parent's debt after they pass away
When a loved one passes away, the last thing you might be thinking about is their debt. However, it's important to take a look at what happens to their debt when they die. If your parent(s) have part of their estate used to pay down their debts, this may eliminate the need for you to pay them off.
Asking an attorney
It's always a good idea to ask an attorney about how your situation will impact your financial future.
If you have questions, you can get a free consultation with the Best Estate Planning Lawyers.
Parklin Law - Estate Planning Lawyer
5772 W 8030 S, # N206
West Jordan UT 84081
(801) 618-0699
