When someone leaves you some cash, land, a turtle, behind in their will, who is on the hook for any outstanding debts?
It goes without saying, nowadays there are fewer and fewer people retiring with a mound of cash. Some of our elderly folks need to work well into their seventies, and even then they’ll end up racking up debt to stay afloat.
In a will a Executor is appointed over the estate to divvy everything up. But what happens when you have more debts than assets?
Well because wills are essentially gifts in kind you can’t really end up with a loss. Imagine that, grandma gives you her VISA bill for Christmas…… That’s not a gift. (That’s a hilarious grandma but not a Christmas gift, at least not in our house).
What will happen if there are debts against the estate is those creditors will be offered a pro rated share of the estate, and the remainder given to the beneficiaries. If the estate can’t cover debts, the estate would declare bankruptcy, but the Executor (recipients in the will) are never on the hook for the debts of someone else.
So go ahead, rack up your credit card bills before you die, nobody will have to pay…..Nah, just kidding, that’s terrible.