Are Heirs Responsible for Debts in New York?

Handling the estate of a loved one is stressful for heirs who are grieving their loss. Receiving calls from debt collectors only makes the situation more difficult. However, in the state of New York, heirs are seldom responsible for the debt of the deceased and the person handling the estate and probate process handles the payments of any debts.

Personal Representative of Deceased

When a person dies in New York, the first step in handling the estate is to appoint a personal representative of the deceased. This person may already be appointed or indicated in the will as the executor or the responsibility may fall to one of the heirs. In some cases, the courts may appoint a public administrator of the estate. This person is responsible for handling the debts and assets of the estate.

Estate Assets

The personal representative first gathers all the assets of the estate of the deceased. This includes bank accounts, insurance policies and investment accounts. The estate assets are then used to pay funeral expenses and outstanding taxes and other debts. The personal representative then distributes any money left over after paying debts as laid out in the will or distributed to the heirs and next of kin if there is no will.

Personal Responsibility of Heirs

In some cases, the estate does not have enough in assets to cover the debts of the deceased. The personal representative and heirs are not responsible for covering these debts out-of-pocket. However, according to New York code, if the creditor files with the court, heirs who receive property from the estate may be ordered to pay debts up to the value of the property received. Debts not covered by the estate's assets or recovered from the value of property in the estate go unpaid.

Considerations

Heirs are responsible for debts of the deceased on a joint accounts. In this case, the full debt passes through to the joint account holder, regardless of who made the actual charges.

Additionally, creditors must still abide by fair debt collection practices. They may not harass family members and heirs and may not disclose the details of the debt to any one other than next of kin or the personal representative of the deceased.