When someone close to you dies, you may find yourself the target of debt collectors even if you are not the next of kin. Debt collectors will follow any possible lead to collect a debt, even if that means pursuing roommates, ex-spouses, stepchildren of ex-spouses, siblings, and parents of the decedent. Their tactics can be so aggressive, many people who are not liable are intimidated because they do not know their legal rights.
If you are contacted about debts owed by a deceased person, refer them to the person named
executor or personal representative of the decedent's estate. If the decedent had a living trust, refer the debt collector to the trustee of the trust. It is best to avoid volunteering any information about the decedent or the estate other than to simply refer them to the person in charge of administering the estate.If you are being harassed by debt collectors about loans or bills owed by your deceased parent, Pennyborn.com features a free sample form letter that shows how to write a letter to your parent's creditors. To ensure all debts of the deceased person are handled in accordance with state law, consult a probate lawyer. To view our free form letter to creditors, see form letter to collector.
One of the most common questions about settling an estate is whether the surviving spouse is responsible for the deceased spouse’s debts. The answer depends on several factors, including the following:1. The type of debt. Types of debt owed by the deceased spouse may include funeral expenses, medical bills, credit card debt, and loans.2. The names on the debt, such as whether both spouses were named on the account or whether the surviving spouse signed forms or other paperwork agreeing to pay the debt.3. The state where the deceased spouse was domiciled. Debts of the deceased are treated differently from state to state. Community property states also treat some debts differently than non-community property states.For an overview of the types of debt a surviving spouse may be required to pay, see deceased spouses debts.
Funeral and Burial Expenses
One very difficult part of losing a relative is having to plan a funeral and make final arrangements. If you have never had to make funeral arrangements before, it can be overwhelming, especially because you typically only have a few hours or days to make decisions you will have to live with for a lifetime. While you may want to take responsibility to pay for burial or cremation of a loved one, you may not be able to pay for it. Even if the deceased had life insurance or other assets to pay for funeral and burial costs, you may not have information about the estate at the time you need to finalize funeral arrangements. The first step in determining how to pay funeral and burial costs for a deceased person is to contact the person named as executor or personal representative of the estate. If you are the executor but do not know how to pay for the decedent's final expenses, consult a probate lawyer to ensure you follow the laws of the state where the decedent was domiciled. You can also ask a local funeral director to explain your options in paying for a funeral, cremation, and burial. However, it is a good idea to avoid signing any forms that may make you financially responsible or providing your credit card information until you have a clear understanding of how you plan to pay the funeral and burial expenses.
If your relative did not leave sufficient funds to pay for a funeral and burial, do not lose hope. There are several options to pay the cost of final arrangements. First, there are burial assistance programs that pay for the disposition of remains when a person is indigent. Be aware, however, that you will not be able to plan a funeral if you are planning to rely on burial assistance. These programs typically only pay for the most minimum services, such as cremation or burial. A new way to pay debts for funeral and burial expenses involves raising donations online. You can easily create a memorial donation website. People can be surprisingly generous and will often make donations on a memorial tribute site to help pay funeral expenses.
Parent's Nursing Home Bills
Many adult children are unaware just how expensive it is to pay for assisted living or nursing home care for a parent. While assisted living can cost several thousand dollars per month, the cost to have your parent receive round the clock nursing home care is often 10,000 dollars or more per month. No matter how much money your elderly parent has in the bank, when he or she has to pay 120,000 dollars or more per year to live in a nursing home, your parent can quickly go broke.Without long term care insurance, Medicaid Planning or savvy estate planning, these expenses can leave adult children at risk for paying long term care bills incurred by their parents for assisted living or nursing home care. To learn whether you are responsible for long term care bills owed by your parent and how to avoid liability, see parents nursing home bills.