Are Heirs Responsible for Their Loved-One’s Debts? 

They say that the only sure things in life are death and taxes. “Debts” should probably be added to the list since those, and taxes must be paid when you die.  

So, you may be wondering: What happens with the debts of someone when they pass away? You hope the answer isn’t that you are responsible for paying them.  

The good news is that you aren’t responsible for your loved one’s debts. The bad news is that creditors, not heirs, have the first shot at getting paid from your loved one’s estate. Depending on the amount of debt, there may be nothing left.  

If you have questions about the debts a loved one has or will leave behind, or if you have been named the executor of someone’s estate, we can help you find answers. The Law Office of Corey J. Rossi proudly represents heirs and executors in probate and estate administration in Tonawanda, Amherst, and Wheatfield, New York, and in Erie County and Niagara County.  

What Happens With Someone’s Debts When They Pass Away? 

As a general rule of thumb, debts belong only to those who incurred them. However, that does not automatically mean that when they die, their debts die with them.  

If a debt is owned jointly or was co-signed by someone other than the deceased, those survivors are responsible for satisfying the debt. In all other cases, only the deceased’s estate is legally responsible for the debt. Paying off debts and distributing the residual of an estate to heirs or beneficiaries of a will is why an individual’s estate is subject to probate administration.  

How Does Estate Administration Work? 

Upon the death of an individual, the executor named in their will files a copy of the will with the probate court. If there is no will, a probate case will be opened, and the court will appoint someone to serve as administrator of the estate. Although this personal representative of the estate can carry out their responsibilities under the court’s supervision, many choose to hire a probate administration attorney to guide them through the process. The attorney’s fees are paid for by the estate, not by the administrator personally.  

The executor’s first responsibility is to identify all assets of the estate and contact all beneficiaries named in the will. In cases where there isn’t a valid will to work off of, then the executor notifies all heirs as qualified under New York’s law of intestate succession.  

The executor must also adhere to a formal, public notification process that gives all creditors, potential heirs, and anyone else who may have a claim against the estate that the estate has been opened. They have a certain period of time in which they must formally file a claim against the estate for any outstanding debt or other interest.  

The executor must confirm that claims are valid, then begin paying creditors first because debts must be paid before beneficiaries or heirs. If the amount of valid claims against the estate is greater than the assets of the estate, then the executor proposes for the court to approve a distributed sum per creditor that reflects each creditor’s percentage of the overall debt.  

Once all debts are paid, any residual is then paid to beneficiaries as directed in the decedent’s will. If there is no will, the estate will be distributed among the heirs under the law of intestate succession.  

Who Is Responsible for the Debts of a Deceased Relative? 

Again, only a party to the debt and the decedent’s estate are responsible for their debts. However, creditors may attempt to pursue debt repayment from heirs and beneficiaries. This can get complicated.  

Let’s say that you are the sole beneficiary of a loved one’s will. After all, creditors who filed timely claims against the state were paid, and you received the residual of $5,000. You are contacted by a creditor who didn’t file a claim against the estate in a timely manner that you need to pay your loved one’s outstanding debt. You can certainly refuse, but if that creditor’s claim is valid and if you received a distribution from the estate, you may have to forfeit the distribution up to the amount you received.  

To be clear, you personally do not owe your loved one’s creditor, but what you received from the estate may be on the table. That creditor would need to file a lawsuit against the assets you received from the estate – not you – and obtain a judgment.  

Of course, problems arise if you’ve already spent the assets you received from the estate. In that case, you may find yourself paying the judgment from your own personal funds. This is why it’s extremely important that executors wait before distributing estate proceeds to beneficiaries and heirs, and why they should hold those assets for a period if there is any indication that a creditor may pursue debt satisfaction even after the probate case is closed.  

What Do I Do if a Debt Collector Harasses Me About a Deceased Relative’s Debt?

Debt collectors can be aggressive and merciless. Their only goal is to get their debt repaid. Because it is, they often harass relatives of a debtor, even when those relatives didn’t receive any proceeds from the estate.  

The best thing you can do if you are being harassed by a decedent’s creditors is to work with a probate attorney. Your attorney will know what (if any) liability you have for the debt and how to intervene with the collection efforts.  

You always have certain protections against harassment by debt collectors, even if you may have to repay the debt from your distribution from the estate. The law guarantees those protections. If your attorney cannot make them stop harassing you, the court can and will.  

Answering Your Most Important Questions

Grief and debt collection can be exhausting. Don’t let questions about how to administer an estate or what your obligations are as a relative overwhelm you. Our attorneys have the answers you need, and we will be happy to help you navigate the probate process. Call the Law Office of Corey J. Rossi in Tonawanda, New York, today. We look forward to working with you.