Who is Responsible for a Deceased Person’s Debt?

Sad stressed woman

When a loved one passes away, it can be tragic to deal with the grief of the person no longer being around. However, it can cause additional stress and anxiety if they passed away with extensive debt, especially when you receive multiple letters about their debt. In many instances, letters asking for a deceased person’s debt can be aggressive, abusive, and threatening, leaving you even more confused and upset. Luckily, a Woodland Hills, California estate planning attorney can help ensure your debt is taken care of when you pass.

Does a Deceased Person’s Debt Go Away After They Pass?

Unfortunately, death does not absolve a person of their debts. Depending on the state they lived and owned property in, the process of resolving debt will vary. For example, in some states, the debt must be paid using funds and assets from their estate, and whatever is left over will be distributed according to the will. Other states require that the will be fulfilled first, and the remaining money can go towards paying off debt.

California is one of the states that require some debt to be paid first, meaning debts owed at a federal or state level will be paid, followed by reasonable expenses to administer the state, and then to the other debts they’ve acquired.

What Happens if the Estate Doesn’t Cover the Debt?

California is a community property state, meaning the spouse of the deceased will take on any properties and, in this case, debts left behind. Unfortunately, this means the surviving spouse would likely need to resolve the balance using their community assets. If there are no community assets involved, the debt will likely go unpaid, as creditors cannot require families to pay out of pocket for their loved one’s debt.

However, creditors only have one year to claim debts. Similarly, not all claims from creditors are valid, so ensuring you have a probate attorney to help you navigate claims is essential to ensure you aren’t paying off unnecessary debts.

Are There Exceptions When Someone Would Have to Pay?

Aside from community property laws in California, there are some other instances where you may have to pay the debt of your loved one.

If you and the deceased shared a joint account, cosigned on their loan, or the state requires you to cover healthcare, you would be responsible for covering the cost of the debt of the deceased if their estate could not fulfill the claims.

Navigating the probate process is confusing, especially when compounded by the grief of losing a loved one. Reaching out to the Law Offices of Yacoba Ann Feldman can help protect you from predatory creditors by assessing the claims and assets left behind. This takes the guesswork out of trying to figure out your loved ones’ debts on your own.

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