The last thing you want to deal with when grieving the passing of a loved one is incessant phone calls, emails, and possibly even personal visits from creditors who are seeking to collect the debt owed by your loved one. Unfortunately, these unethical and sometimes illegal practices are not uncommon. Creditors often take advantage of a family member’s grief and lack of knowledge on the law governing a decedent’s debts in an effort to get the family member to answer for the decedent’s debts.
Well, here is something that might come as a bit of a surprise to you: you do not have to personally pay those creditors!
In the majority of situations, a family member does not have to pay the decedent’s debts. There are two exceptions to this general rule in Florida. The first occurs when the family member co-signed the debt obligation along with the decedent. This situation commonly occurs with credit card accounts. For example, the decedent and the family member might have shared a credit card and were both listed as co-signers or guarantors for the credit card account. In this situation, the surviving family member would have to pay the outstanding credit card debts, even though he or she might have not been responsible for all of the charges on the account. The second exception, and one which is invoked much less frequently, takes place when the family member was responsible for administering the decedent’s estate, but failed to comply with Florida state probate laws. In this second situation, the family member may, but will not necessarily be required to, satisfy the decedent’s outstanding debts.
Florida, as well as Federal law, are both clear on the fact that a decedent’s outstanding debts come out of the decedent’s estate, and not out of the family member’s own pockets. An estate represents all of the individual’s assets, including one’s home, vehicles, entitlements to property, entitlements to future payments, interests, etc. That sum is then subtracted by the individual’s liabilities (or debts) to reach the monetary figure that the individual’s estate is valued at.
Estate planning is the legal field dedicated to making the process of estate distribution simple and efficient. When the individual passes away, and it is time to distribute the estate amongst the decedent’s heirs, an estate planning attorney will help the family members in this distribution and ensure that the estate is distributed properly.
One of the first steps in the process of estate distribution is determining if the decedent had any outstanding debts. Because an individual’s estate is comprised of the individual’s assets and liabilities, the estate cannot be distributed properly without first acknowledging and satisfying the debts that the decedent owed before passing away. Once the decedent’s debts and creditors have been identified, the valid claims must be satisfied pursuant to Fla. Stat. § 733.707.
Unfortunately for prospective heirs, all creditors must be paid before the administrator of the estate could begin to split the remaining value of the estate amongst the rightful heirs. If the debts that the decedent accumulated are greater in value than the value of the assets that the decedent owned, the heirs will not receive anything. However, if this situation occurs, the creditors will not be able to go after the decedent’s family members to recover any unpaid portion of the debt that was not satisfied by the estate due to insufficient assets.
An experienced estate planning attorney will ensure that you have the necessary information to make decisions regarding estate planning, preparing a will or trust, and minimizing taxes owed upon your passing. If you are looking for an experienced and qualified Florida attorney, please do not hesitate to contact the attorneys at Chepenik Trushin, who are ready, willing, and able to assist you with all of your estate planning needs.