Is an estate liable for a deceased person’s debts?

| Mar 19, 2021 | Estate Plan

When people talk about estate planning, many people’s minds jump to thinking about assets like real property and money. The truth is that when a Michigan resident dies, they can still leave debts behind. Understanding how to handle these debts is imperative to lessening the stress of your grieving family when a loved one passes away.

Who is liable for debts?

After a loved one dies, it may be easy to think that their debts pass along with them. Unfortunately, that’s not the case. While family members are not required to pay for the decedent’s debts with their own assets, that doesn’t mean that they don’t get paid. Rather, the estate is responsible for the obligations.

In the event that the deceased person’s estate is valued at less than the total amount of debts they had, the debt simply goes unpaid. In some rare cases, a survivor may be responsible for debts. For example, if a person co-signed a debt obligation with the decedent, they are still liable.

Who’s responsible for paying debts out of the estate assets?

If your loved one prepared an estate plan and drafted a will that stated a particular person was to be the executor, then that person is responsible for handling the debts along with other affairs. In the event that there was no will, the court will appoint an administrator to take care of these functions.

While dealing with the death of a loved one can be difficult, to begin with, handling the financial aspects of their passing can be overwhelming. By understanding how debts are to be handled, it can remove some of the burden.

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