Am I Responsible for My Deceased Family Member’s Debts?

When someone passes away suddenly, a lot of questions are raised. This is even more true when the person didn’t take any precautionary steps in terms of estate planning. Once the estate goes through the probate process, family members may be curious about the impact of debts.


One of the biggest myths in the world of estate planning has to do with who is responsible for the debts generated by a person who has recently passed away. If you have a loved one and they have amassed a great deal of debt over the course of their life and you’re concerned that you will inherit it upon their passing, remember that contrary to popular belief, heirs are not always responsible for settling the debts for a deceased family member.

The deceased’s estate will be evaluated during the probate process and any amount that is owed to creditors will be settled during that time. Bear in mind that the debt does not extend beyond the estate. If there’s not enough assets inside the estate to satisfy the creditors, then that debt ends. Beneficiaries might not receive the full amount intended, however, if this does happen and could miss out on expected distributions if all of the assets inside the estate have been used to satisfy creditors.

Setting up an irrevocable trust can remove this problem since once the trust has been established, then the creator no longer owns these assets legally and can no longer control how the assets are distributed. Many families use this opportunity to decrease their own personal liability.

For more information about what happens when a loved one passes away, talk to a New Jersey estate planning attorney.