1. The estate pays off debts. Generally, family members are not responsible for any debts for someone who has died. Debts might need to be paid back, but that money has to come out of the person's estate, not your pocket.
"If your dad died, his estate is the only entity liable for that debt," said Don Ford, a board-certified estate and probate lawyer with Ford & Bergner in Houston.
As long as there's money in an estate, debts are repaid first. Then any remaining money goes to beneficiaries. There is an order to how debts must be repaid. Funeral expenses, taxes and secured debts are the top. Unsecured debts, such as credit cards, are near the bottom. If the estate does not have enough money to pay back all the debt, creditors are out of luck.
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Remember that jewelry, antiques and other valuables must all be added to the estate. You might be forced to sell some of them in order to pay back creditors.
Though debts are the estate's responsibility, there are times when the executor might be personally liable, said Martin Shenkman, an estate attorney in New Jersey. If an executor pays out beneficiaries from an estate before all the debts are settled, creditors could make a claim against that person personally.