Many Florida residents may wonder what happens to debts after someone dies. Are surviving children responsible for that debt, and can creditor claims be made on any inheritance that is passed on? Unfortunately, there is more than one answer to these questions.
Yes, creditors can make claims against an estate for any outstanding debts owed by the deceased, but the type of debt can change whether or not that is the case. The keyword here is estate. Creditors are generally allotted a certain time frame to make claims against the estate for any outstanding debts, which in Florida is typically three months. However, these claims are against the estate itself, not against any surviving children.
The type of debt may determine if claims are made against children or the estate of the deceased. The responsibility to pay back credit card debt typically does not pass on to children; however, medical debts might. Mortgage debt may have to be paid, though selling the home — short sale if necessary — can eliminate that debt. It may also be possible for beneficiaries to negotiate debts with creditors to reduce amounts owed.
When it comes to inheritance, yes, creditor claims can be made and any money set aside for inheritance will typically go to cover debts first. Anything left over would then be passed on according to the estate plan. The death of a parent is difficult to process, and if debts are left behind, a lot of questions may come to mind. Seeking counsel can help beneficiaries in Florida determine what debts they are legally responsible for and would likely prove beneficial in making sure creditors aren’t taking advantage of the situation.
Source: ozarksfirst.com, “Inherited Debt – Are You Responsible?”, , June 23, 2014