Can You Inherit Debt from Your Parents or a Relative?
Unfortunately, death is a part of life. Sometimes, a parent or relative is able to leave something behind for their loved ones. It is not always as simple as just leaving assets in many cases. This is because most people have some form of debt. If loved one dies and does not have a will in place, things can be complicated. This is often the case even when there is a will in place. Keep reading to find out why.
Potential Debts That Could Need Attention
The last thing you want to have to deal with is the legal side of the death of a loved one. Unfortunately, it is something that requires attention and sooner rather than later. If a loved one passes away, look for debts such as:
- Credit cards
- Medical bills
- Student loans
- Personal loans
You are not on the hook for the debts associated with the accounts listed above in MOST cases. If you cosigned for any of the afore mentioned accounts, you are most likely on the hook for the outstanding debt.
If You Inherited an Estate
Inheriting an estate is usually a blessing, but there are some sticking points. Whether it be land, property, money, or anything else, it is only worth something if the value is greater than the debt your loved one left behind. For example, if your loved one dies and leaves an estate worth $100,000 and they owe $20,000 in credit card debt, you will most likely need to sell enough of the estate to cover the credit card debt.
It is a simple enough equation, but this is not the only way things can occur.
If You and One or More Family Members Inherit the Same Estate or Assets
Things get a little trickier in this situation. Here is an example: You and your two siblings inherit a plot of land. You do not want to keep your part due to personal property taxes and you could use the money. You want to sell, but your siblings do not. You ask them to buy you out and they refuse or cannot afford to do it. Now, you have two options: Keep your portion of the land or get an attorney to force the issue.
Getting an attorney to force your family to cooperate with you in the afore described scenario is not idea, but it may be your only option. This is why it is recommended that a detailed will be created and that assets liquidated and cash dispersed rather than assets be shared.
If you have inherited assets from a lost loved one, you need to be aware of the debt, tax, and potential legal implications. Even when a will is in place, things can get complex. If you are in this situation or if you are ready to create an air-tight will, you need the services of a licensed attorney. The attorneys at Dsouza and Strachan Lawgroup Group have been assisting people just like you with their estate planning/handling needs for over 15 years. Contact Dsouza and Strachan Lawgroup Group today for a free consultation.