When an individual dies, one of the main questions his family member may have is who is responsible for his outstanding debts. Fortunately, debts may only be allocated to the individual's beneficiaries in certain circumstances.
Facts
Unlike assets, debts are not typically inherited by family members when an individual dies. If the deceased individual is the only person legally responsible for paying the debts, they may not get paid at all.
Features
In order for a creditor to receive payment for a debt owed by the deceased, it must file a claim against the deceased individual's estate.
Significance
If the deceased individual lived in a community property state, such as California, her spouse may be held legally responsible for paying her debts--even if they are not in his name.
Considerations
Any debts that were accrued under a joint account that the deceased held with another individual are automatically transferred to the surviving account holder. Whether or not the surviving account holder accrued the debts is irrelevant.
Warning
Collection agencies will often attempt to collect a deceased individual's debts from family members who are not legally obligated to pay.
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