Who is financially responsible when a parent dies?

If your parents die and leave debts without enough money to cover them, creditors may come after you to collect. It is not your responsibility to pay. Once the estate is in probate, an attorney or the state will create a list of debtors needing to be repaid.

What happens if an elderly person has no assets?

Often, elderly people live on Social Security and no longer own a home, leaving them with little to no assets to pay for their funeral costs or pass on to their heirs. If they have debts, this can leave the executor of the estate in a tricky situation with creditors, as well.

Who is responsible for paying off a debt of a deceased person?

Generally, the deceased person’s estate is responsible for paying any unpaid debts. The estate’s finances are handled by the personal representative, executor, or administrator. That person pays any debts from the money in the estate, not from their own money.

What happens to the estate of a person who has died?

You still have to include this money as part of the estate when you work out Inheritance Tax. If the person who died owned the whole of the home with another person (‘joint tenancy’), ownership passes to the other owner. Otherwise, their share goes to the beneficiary named in the will.

What happens if there is no money in the estate?

However, if there is no money at all in the estate, then the relatives will have to pay for the funeral costs. Surviving descendants should discuss how much they can afford to spend and plan the funeral accordingly. Cremation instead of traditional burial can significantly cut the cost.

What happens to an estate when a parent dies?

When your parent (or anyone for that matter) passes away, if the estate has any assets, those assets are first paid to creditors who submit valid claims to the probate court. If there are little to no assets to be marshalled into the estate, many of these creditors will have to write off the uncollectible debt.