When your parents pass away, they name you as the estate executor. This gives you certain obligations, like making an inventory of any assets that they own, informing heirs and beneficiaries of what they should receive, providing copies of the will and much more.
What you find out is that you are also obligated to pay the debts that your parents left behind. This could include something like credit card debt or a home loan. But even if your parents have made plans to pay off most of their debts, there will still likely be some outstanding issues that have to be considered. For example, you may need to pay their property taxes or income taxes for the last year of their life, which they never had time to pay on their own.
You do not have to use personal funds
People are sometimes worried about this situation, claiming that it’s not fair that they should have to pay their parents’ debt. And it wouldn’t be. You do not have to use your own personal funds to pay back money that your parents owe unless you are a cosigner on the loan with them.
Instead, you have an obligation as the estate executor to use the funds from the estate. So the estate plan may tell you how to distribute assets to various heirs and beneficiaries. But you first need to pay off those debts and then split up whatever assets remain. In this way, your parents are still the ones paying off those debts, and you’re just the one helping them do so.
Going through this process can be complicated, especially if you’ve never done it before. Be sure you know exactly what legal steps to take.