Can I Inherit Someone’s Debt?

  • Illinois Probate Law
can I inherit someone's debt | estate and probate legal group

When a loved one passes, the last thing you want to think about is paying off their debt. But part of closing a person’s estate includes contacting all utility companies, credit cards, and other businesses to inform them of the person’s passing. And here is where it gets tricky. You may wonder, ‘Can I inherit someone’s debt’? Are you responsible for your family’s bills?

Inherit Someone’s Debt

As a general rule, the family does not inherit a person’s debt – but the estate is responsible for paying it off. This means that the money left in bank accounts or from the sale of assets should be used to pay off all debts. Even before it passes to beneficiaries.

But not when the person has named beneficiaries on accounts such as retirement or life insurance. These pay the beneficiary immediately. The payments to the beneficiary will not go through probate or to creditors.

Does It Depend On Who’s Debt It Is?

The situation may change depending on your relation to the person who has died.

When your parents die, you are not responsible for their debt unless you co-signed a loan, a joint credit card or a line of credit. In some states, long-term care, such as nursing homes, may require you to cover the living costs that were not paid when your parents were staying there.

Adult Children
The rules are the same for parents. You are not responsible for your adult child’s debt unless you co-signed for a private student loan, car or mortgage. If your child took out a PLUS loan, the government usually forgives it when they pass away.

Illinois is not a community state where everything is legally split 50/50. The estate may be responsible for all debts, but not you personally. The court decides property based on each person’s contributions and the situation.

How To Protect Yourself

It’s best to speak with an estate planning attorney before automatically paying off all the person’s debt, either on your own or through the estate. There are debts that you may not need to pay off.

The Fair Debt Collection Practices Act protects you against the predatory practices of debt collectors. This can include calling you and using harassing language or perusing you for a debt you don’t owe.

Do You Need to Talk to An Oak Brook Estate Planning Attorney?

Talk to the experienced probate attorneys at the Estate and Probate Legal Group about protecting yourself from the debt of a loved one. Talk with us to find out what you may be responsible for and what you are NOT required to pay. Contact us today at 630-864-5835.

AREAS WE SERVE: Cook, DuPage, Kane, Lake and Will counties