Are my siblings andI responsible for debts our father incurred whille he was alive?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Are my siblings andI responsible for debts our father incurred whille he was alive?
There may be a life insurance policy with me as the beneficiary. Do those funds have to go to pay off his debt? He has a mortgage, and we plan on letting the house go back to the bank; there is no mortgage insurance. He had about $15,000 in credit card debt, can they come after any life insurance policy or other accounts? I already closed his checking account where i was named beneficiary ($5000). There was no Will done.
Asked on November 28, 2011 under Estate Planning, Nevada
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Children do not inherit their parent's debt. In other words, a child bears no legal responsibility for a deceased parent's finances. However, their deceased parent's estate does bear such a responsibility. Consequently, to the extent there are assets in the estate, creditors will need to be paid before any distribution is made to the heirs. If there are not enough assets to cover all outstanding debts, then the creditors will right them off and estate liability will extinguish.
That having been said, some assets pass outside of the probate estate. One such asset are the proceeds from a life insurance policy. These funds are out of the reach of creditors. However, beneficiaries of bank accounts (POD accounts) may be subject to the claims of creditors if the deceased didn't leave enough other assets to pay them.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.