The facts about inheriting financial challenges
Adults with aging parents are often confronted with a number of financial and emotional difficulties, as adult children may have to take on the role of caregiver as well as manage their parents’ personal affairs. The situation can become even more difficult when elderly parents have accumulated unpaid bills and/or a considerable amount of personal debt. Here are a few key concepts that Florida families should keep in mind when approaching the debts of a recently deceased parent.
Creditors will typically pursue a deceased person’s estate to recuperate moneys owed. As a result, the amount of inheritance that a son or daughter receives can be affected by the debt collection process. However, adult children are not normally held directly responsible for repaying their parent’s debts after they pass away. For instance, adult children should not be subjected to harassment from collection agencies and are not liable for their deceased parent’s outstanding credit card debts unless their name is on them.
Similarly, people who inherit their parents’ mortgaged home are only customarily responsible for resuming house payments. And in the event that the house goes into foreclosure because it is worth less than the mortgage loan, the credit rating of the adult child who inherited the property should generally not be adversely affected. When it comes to unpaid medical bills incurred by a parent prior to their death, the estate may be pursued. People’s personal assets are also protected from efforts to cover debts such as Medicaid expenses.
Bankruptcy law is complicated enough without the added difficulty of navigating others’ financial difficulties. People who are concerned about their parents’ or their own financial situation can meet with an experienced bankruptcy lawyer to discuss their options and address potential issues.
Source: CNN Money, “Can you inherit your dead parent’s debts?” Jeanne Sahadi, June 19, 2014