How do I handle my parent’s debt in probate?

The death of a parent can be a devastating loss for any child. Unfortunately, it can become even more difficult to handle when a parent has left behind considerable debt.

According to this report from the Associated Press, this is not an uncommon scenario. In fact, roughly 50 percent of seniors pass away owning less than $10,000 in assets. And increasingly, they are leaving behind mortgages, credit card balances and other types of debt. As such, it is important to know what to do if your parent will leave or has left debt after his or her passing.

How (and if) debts are paid

During the probate process, the estate representative will identify valid debts and pay them. This typically involves selling any non-exempt assets or property. However, if there is no money in the estate to pay debts and there is no spouse to take on the responsibility of paying the debts, then they will likely not be paid.

When you might have to pay a parent’s debts

If you inherited a home from a parent, then you may assume the mortgage payments in some cases. However, you will not have to pay off the mortgage in full when the transfer of property is the result of a parent owner’s death.

You might also be responsible for debts if you co-signed for them, so be judicious about “helping” a parent by co-signing on a loan or applying for credit with him or her.

Dealing with demands for payment

During such a difficult and emotional time, it is sadly not uncommon for creditors and other parties to go after family members for repayment of debt, even when they are not obligated to pay. In these situations, it is crucial to understand your rights regarding whether you have any financial responsibility of not.

Death and debt are topics that are difficult to deal with on their own; when these situations coincide, loved ones can easily get overwhelmed. Under these circumstances, it can be wise to try to stay calm and discuss your legal options and protections with an attorney.