Is there any 'free' basic financial advice out there regarding the inheritance of debts after a parent's death?
I've been looking online for information and I've literally found opposite answers to some things regarding how debt gets carried-over to an estate after the death of a parent. Basically, I've been trying to find out if medical debt is forgiven after death or does the estate need to pay for it with it's assets? Same goes for credit card debt.
I've been trying to get this information beforehand (both parents are still alive, but it's good to know). My dad has some credit card debt (<$10,000 and will likely have medical debt as he gets older as well). He does not own a house, and does not have car payments. He will have some money in the bank, and a small life insurance policy. He lives off of social security and pension .(The state is New Jersey if that matters). So if anybody has information on this or knows of a professional I can email/etc, please let me know.
EDIT - The only assets he would have is a life insurance policy (which I'm learning is exempt from the estate), and a checking account (which I will soon have joint-access to, so if we are both "owners" of the checking account, I wouldn't know how this works, but I could easily just close-out this account I'd assume)
- STEVEN FLv 71 month ago
You DON'T inherit debt, but you don't inherit ANYTHING until the debts are paid.
- Anonymous1 month ago
There is no such thing there is free lawful or financial advice that you can trust. Consult your lawyer. There are tons of regulations related to that but also plenty of potholes, rabbit holes, and bugs.
- ibu guruLv 71 month ago
The estate must go to probate before any assets can be transferred to any heirs. The insurance policy passes outside the estate, and goes directly to the named beneficiary, unless "estate" is the named beneficiary. But everything else goes through probate so that all debts are paid, any estate taxes paid, and if there is anything left, it goes to heirs according to the decedent's will. So yes, the credit cards & any hospital bills or other final expenses get paid first.
Your father needs to pay off his debts & get "final expense" or "funeral" insurance or something to pay his final expenses, or he is leaving you with his funeral expenses & a big mess.
- garryLv 61 month ago
the answer is simple the tax must be paid from what they get from the estate , if enough is given by the property sale then you get nothing , as simple as that , they have the first option on the sale of the estate , you get whats left over ..
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- Christin KLv 71 month ago
You are going to need to contact an attorney in your state. Every state is different when it comes to unsecured debt after death. There should be a legal aid office in New Jersey you can call to find out if you can get a telephone consultation with an attorney about this issue. You should also be able to Google this using your STATE in the search bar--i.e., "unsecured debt after death New Jersey", not just "debt after death". Be specific in your search.
Money left in a checking account after death is accessible by a co-owner of that account--if both your names are on the account, you may write checks on it without any legal instruments such as power of attorney. If it ISN'T, your father needed to give you "POD" (Pay on Death) power by signing something to that effect with the bank BEFORE he died. If he didn't do that, then money in that account will not be distributed to you (or anyone) until the estate is probated. Call the bank to find out.
You will also need to send copies of the death certificate to all his creditors. That will include his credit card companies and the originators of the medical debt, as well as Social Security and his pension holder, and the life insurance company.
- JudyLv 71 month ago
The estate needs to pay its debts. If the estate runs out of money bfor everything is paid, the rest of medical bills are forgiven.
- Elaine MLv 71 month ago
Call Legal Aid, they're in the phone book and are free.
- Anonymous1 month ago
Any probate lawyer can tell you. Whatever assets he has will go to pay his debts. If there is no money then the debts die. No one can come after you.
- John AldenLv 71 month ago
If there was no pre-existing trust that transferred them to the ownership of the trust instantly upon the death of the individual they must be carried over as part of the estate and used to satisfy any debt that was present in the deceased person's life presuming there is no surviving spouse who then may be responsible for the debt.
Life insurance is not part of an estate as it passes immediately to the beneficiary.Assets that want to be protected must be done so prior to death in the time frame dictated by the law's regarding such in the individual's country/state/city/county of residence. Often at least 5 years or more before death. An estate lawyer is best consulted to set this up.
These are general comments from an old fart, not a legal expert.
- n2mamaLv 71 month ago
When someone dies, their estate has to pay off debts before any assets can be distributed. If your dad dies with $8000 in credit card debt, $50,000 in medical debt, and $45,000 in assets, the debts will take the entirety of the estate, leaving any heirs with nothing. But the heirs aren’t held responsible for the remaining $13,000 in debt (except perhaps if the credit card was jointly held). If dad had assets of $70,000, the debts get paid first, then the remaining assets ($12,000) get distributed per the will or state law if he died intestate.