When a relative passes away, there are a myriad of factors to think about. Among those concerns may be debt that relative still owed when they passed – but what becomes of that debt?
The good news is, generally speaking, you will not be responsible for that debt. Such a debt would only attach to you if you co-signed or otherwise guaranteed payment for that debt in an affirmative way to the creditor.
Even if you aren’t liable to pay off your deceased relative’s debt, creditors may nonetheless contact or otherwise harass you demanding you pay the debt. Don’t assume that just because they are making such demands to you that they have a valid claim.
That being said, the debts of your deceased relative may still affect you in some way if that relative named you as a beneficiary in their estate. This is because when someone passes and their estate goes through probate, before distributions of that estate can be made to beneficiaries, any bills the deceased owed at death will be paid off first. [If you’re curious to read the order in which creditors get paid, feel free to check out the statute: 733.707, Fla. Stat. (2021)].
For example, let’s say your relative passed away with an estate worth $200k, and named you and your sibling to each take half of that estate in her will. If there were no other factors, each of you would get one half of the estate ($100k to you and $100k to your sibling). If your relative passed away with $20k in debt (and this debt is ruled valid by the Court), that creditor would have priority to receive that $20k from the estate before distributions to you and your sibling were made. In that scenario, both you and your sibling would each receive $90k respectively (accounting for the $180k left over after the debt was paid off).
Even in the scenario described above, remember that it is still your relative paying off the debt through the estate, not you! If you are being harassed by creditors for the debt of a deceased relative that you did not sign onto yourself, don’t commit to anything they ask. Tell the creditor that you will speak with your attorney about the debt and stop the conversation there.
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