Sunday, February 20, 2011
A common question that arises in some estate administration is "whether the beneficiaries of the decedent are responsible for any unpaid debts?" Short answer: generally, no. Barring any issues such as fraudulent activities by the beneficiaries, if the estate is a bankrupt estate and insufficient assets to pay the debts, that will be the end of the story on the debts. The court may determine which creditors are paid and how much of their claims are paid, but that unpaid amount of the debt will not pass to the beneficiaries. Thus, when a client signs their will and jokes that their kids won't get anything except their unpaid bills, that isn't entirely accurate.