When a person passes away, the handling of their debts can be a complex and emotional process for the surviving family members. It is common to wonder if you will have to pay those bills. Knowing the rules about how to handle debts after a person’s death can help reduce stress for family members.
Who pays for the debts a person leaves behind?
When someone dies, all their assets and liabilities are collectively known as their “estate.” In California, the estate is responsible for paying off any debts that the deceased has left behind. California law specifies the order in which debts should be paid from the estate:
- Costs for managing the estate.
- Mortgages and liens.
- Funeral costs.
- Medical bills from the deceased person’s last illness.
- Money to support the surviving spouse and young children.
- Claims for unpaid wages.
- Other debts
The executor, who oversees the estate, pays off these debts in this order. Whatever is left goes to the deceased person’s heirs. If there is not enough money in the estate to cover all the debts, they pay as much as they can following this order. In this situation, lower-priority debts may go unpaid, and the heirs might not receive anything.
Do you have to pay off your loved one’s debts?
It is important to note that family members do not usually have to pay the deceased’s debts from their own money. However, if the person who passed away shared responsibility for their debts – whether as a joint account owner, authorized user or co-signer – the other person on the account may still have to pay.
Handling debts after a death can be challenging. Luckily, an experienced probate attorney can help. They can give advice specific to your situation and help executors manage everything correctly and legally.
Dealing with the debts a person leaves behind can add an additional layer of stress to their passing. Understanding these key points about managing debts after someone dies in California can help you manage a loved one’s estate or plan ahead for your own peace of mind.