Can the adult children of deceased parents be required to pay off their debts? Legal experts explain that confusion around this issue is widespread. Here’s why, along with information and guidance for families working through the probate process when a parent dies without a will and in debt.
Resolution Through Probate Court
Typically when someone dies without a will and designated executor, an administrator is appointed in probate court to settle the affairs of the deceased following the laws of intestate succession. Depending on the circumstances, the court appointed fiduciary managing the affairs of the deceased could also be referred to as a personal representative. Regardless, in probate court, outstanding debts must be resolved before other matters, including the distribution of assets, can proceed. As to the issue of “filial responsibility,” New Orleans City Business reports:
More than half of the states still have “filial responsibility” laws on the books that technically could require adult children to pay their impoverished parents’ bills, says estate and elder law attorney Letha McDowell of Kitty Hawk, North Carolina.
These laws are holdovers from a time when debtors prisons existed, says McDowell, who is president of the National Academy of Elder Law Attorneys. Their use has faded since the 1965 creation of Medicare — the health coverage program for people 65 and over — and Medicaid, the health coverage program for the poor. Filial responsibility statutes are rarely enforced, although in 2012, a nursing home chain used Pennsylvania’s law to successfully sue a son for his mother’s $93,000 bill. Some legal experts have predicted more such lawsuits as long-term care costs rise, but so far that hasn’t materialized, McDowell says.
Helpful To Know
Frequently, especially when matters of the deceased are complex, and conflict is a possibility, probate courts require procurement of an administrator bond, upon the appointment of the administrator. An administrator bond is a type of fiduciary bond that protects the interests of the estate and its beneficiaries in accordance with state law. Essentially, the administrator bond guarantees the faithful performance of the appointed administrator. As a leading national and direct provider of all kinds of fiduciary bonds, Colonial Surety helps court appointed administrators in every state quickly and affordably obtain their bonds. The steps to obtaining an administrator bond with Colonial are easy: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere—even while at court. It’s that simple. Administrator Bond Here.
Myth or Fact?
According to Chicago estate planning attorney, Michael Witty, two myths about liability for the debt of deceased parents are common:
The first myth is that an adult child will become liable for their parents’ debt. The second myth is that they can’t. Adult children typically don’t have to pay their parents’ bills, but there are exceptions. And even when a child doesn’t have to pay directly, debt could reduce what they inherit. Debt doesn’t simply disappear when someone dies…Creditors can file claims against the estate, and those claims usually have to be paid before anything is distributed to heirs. Creditors also are allowed to contact relatives about the dead person’s debts, even if those family members have no legal obligation to pay…Generally, family members don’t have to use their own money to pay a dead relative’s debts unless they:
— Co-signed a loan, were a joint account holder or otherwise agreed to be held responsible for the debt.
— Are the surviving spouse and live in a community property state or a state that requires surviving spouses to pay debts such as medical bills.
— Were legally responsible for settling the estate and didn’t follow state law.
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