When a person passes away, remaining family members are not normally held responsible for the deceased person's outstanding debts. State laws vary and can be a bit complicated in states that have community property laws. New York is not a community property state, which means the decedent's spouse is not responsible for paying outstanding debts, nor are any other family members. Instead, the deceased person's estate is responsible for debts.
Probate Process
When a person passes away in the state of New York, a probate court process is opened so that all final financial matters can be settled for the decedent. The probate process is designed to inform all interested parties of the death, settle debts and disperse any remaining property or assets.
Decedent's Estate
A decedent's estate includes all assets -- tangible and intangible property he owned while alive -- and all debts left outstanding. Assets are valuables that are worth money of some sort, and can be in the form of land, a home, a vehicle, jewelry, bank accounts, investments and retirement funds. Debts include remaining balances on a mortgage or car loan, credit card balances, taxes and municipal bills.
No Community Property
New York is not a community property state, which means a decedent's debts are her responsibility alone -- not the responsibility of her spouse or family. Only the deceased person's assets and debts are included as part of the estate and probate process, and surviving family members cannot be held liable for outstanding debts that the estate cannot cover.
Estate Executor
An estate executor or administrator is assigned as a representative during the probate process, and part of the executor's job is to ensure all outstanding debts are paid. The executor may sell some of the estate assets in order to fully settle outstanding debts for the decedent. If assets remain once the estate is settled, the executor distributes them to the decedent's beneficiaries.
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