Debt Responsibilities After a Family Death

The responsibility of paying a family members debt after death primarily falls to the estate of the deceased. In some cases, a surviving spouse and the children of the deceased may be responsible, depending on the terms of the family members will, the laws in their state of residence and the terms of a debt agreement.

Executor

The executor of a deceased family members estate has the responsibility of paying legitimate estate debts with the assets of the estate. Certain debts take priority, such as taxes, mortgages and installment loans. Payment of unsecured debts, such as utility bills and revolving loan accounts, are ranked in accordance with the laws of the deceaseds state and approved through probate court. The executor makes the decision to liquidate assets to cover debt; if the assets are insufficient, the debts may not be paid.

Spouse

Community property states, and states that uphold the Doctrine of Necessaries, may hold the surviving spouse responsible for certain debts that are not paid by the deceaseds estate. For example, if the estate had insufficient assets to cover outstanding credit card debt, the surviving spouse may have to pay the balance. Community property states include Wisconsin, New Mexico, Alaska, California, Louisiana, Arizona, Washington, Nevada, Idaho and Arizona. The Doctrine of Necessaries is a common law that other states, such as Ohio and Connecticut, recognize, which can make the surviving spouse responsible for debt relating to necessary expenses. Medical debt and credit card charges directly relating to living expenses may be considered necessary.

Beneficiaries

Children and other beneficiaries of deceased family members other than the spouse may be responsible for the deceaseds debt under a few specific instances. If the beneficiaries jointly own installment loans, open credit accounts and other debt with the deceased family member, the beneficiaries will be responsible for their share of the debt. The family members estate is responsible for the deceaseds portion of the debt. In the case of a mortgage, if the family member bequeathed the secured property to a beneficiary, the beneficiary may be responsible for the mortgage. If the bequeath is subject to the mortgage, the beneficiary is responsible. If the bequeath is not subject to the loan, the family members estate pays the debt and transfers the title. Either way, the beneficiary or the estate may sell the property to satisfy the debt.

Joint Account Holders

Any person who is listed as a joint account holder on any type of loan is responsible for the debt related to the account. After a family member dies, the estate is responsible for a portion of the debt, but the joint account owner is also responsible. If the estate cannot pay the portion of the debt, the joint account owner may be liable for the entire balance due.