After a relative dies, there is often a lot of paperwork to sort through. If you discover that a grandparent died while in debt, you need to forward any bills, promissory notes or contracts to the state executor. You are not responsible for paying the debt, but the grandparent's creditors have a right to compensation from your grandparent's estate.
No Inherited Debt
In the United States, debt is not inheritable. If your grandparents die while in debt, it is up to their creditors to try to secure payment from their estate. You are not required to pay off their debts from your personal funds. The creditor cannot harm your credit by reporting their debts as yours to credit bureaus.
Joint Debt
The only instance in which you might be liable for your grandparents debts is if you cosigned for a loan or took out a joint credit card with one or both of your grandparents. In such cases, you are expected to pay off the debt because of your status as a co-debtor.
Settling a Will
After someone dies, the executor or administrator of his estate must identify all the assets and debts of the deceased. Debts should be paid directly from the assets of the deceased. After your grandparents die, the person in charge of settling their estate should ensure that their assets first go toward paying their debts. If your grandparents leave behind a considerable amount of debt, their assets may be sold to compensate their creditors. The sale of their assets may be required even if they have left those assets to their heirs in their will. However, neither you nor any other heir is responsible for paying any debt balance left after your grandparents assets are liquidated for the purpose of paying off creditors.
Deceased Debt Collection
After a relative dies, you and other family members may receive calls from people claiming to be debt collectors. In some cases, these "debt collectors" are nothing more than con artists who got your family's name through death notices or other public records. They may try to intimidate you into paying your relative's debt, even though you are not legally responsible for it. In other cases, legitimate debt collection agencies may contact you about debt repayment. In both cases, you should not agree to pay any debt, and you should direct the caller to the executor or the administrator of the estate. Even legitimate debt collectors sometimes try to persuade you to pay a debt on behalf of the deceased relative. If this happens, refer the collector to the estate's executor. If collectors persist in calling, exercise your rights under the Fair Debt Collections Practices Act and send them a letter via certified mail telling them not to contact you again.
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