by Attorney Jennifer D. Kahl on Monday, December 3, 2018
Losing a parent is always a difficult experience. Stress about the financial implications of the death can make things even worse! If your parent had debt when he or she died, you may be wondering if you are responsible for that debt.
In Virginia, you are not personally responsible for your parent’s debts
The good news is that no, you are not personally responsible for the debts of your parents. Your mom may have racked up tons of credit card debt before her death, but you are not required to use any of your own money to pay that debt. Remember this when her creditors start reaching out to you. They may try to guilt you into thinking that you are responsible for the debt, or tell you that paying her debt is “the right thing to do.” Don’t allow yourself to be intimidated by this. If the Court has qualified you as the Executor of the Estate, tell the creditor to send you the bill and that you will address the debt in due course as you administer the estate. If someone else is the Executor, direct the creditor to that person. If no one has qualified as the Executor, simply explain this to the creditor and end the conversation.
However…
Though creditors cannot go after YOUR assets, they CAN go after the assets that Mom left behind. So, if Mom died with $100,000 of debt and $60,000 in her bank account, her creditors CAN pursue the $60,000 in the bank account. Unfortunately for you, you will not inherit anything from Mom. Unfortunately for the creditors, they will have to write off $40,000. So, though you don’t have to reach into your own pocket to pay Mom’s debts, your inheritance will be reduced, or even eliminated, in order to satisfy the debt.
A word of caution for executors
In Virginia, you do not become the Executor or Administrator until you have gone to the Court and become qualified. If you have done this, you need to be very careful when it comes to managing debts. If you manage the estate incorrectly, you can become personally liable for the decedent’s debts. There are a myriad of seemingly innocent things that can bring this liability upon you (paying creditors in the wrong order, distributing to beneficiaries too soon, etc.). In situations where the amount of debt exceeds the estate assets, it is often better to avoid qualification all together. Because of this, all prospective Executors should consult with an experienced probate attorney at the very onset of the process. Your attorney can alert you to potential pitfalls, advise you of things you can do to limit your liability, and ensure that the process runs smoothly.