Who pays the debt of a decedent in Pennsylvania?

estate planning

Your loved one recently passed away, but you recently discovered that the individual is in a significant amount of debt. You may feel unsure of what to do or how to proceed, but our firm is here to help. To learn more about who is responsible for paying the debt of a decedent, keep reading and give our legal team a call today. Our skilled Pennsylvania estate planning attorneys are on your side.

Who can be held responsible for paying the debt?

Keep in mind that most debt does not just “go away” once the debt holder is deceased.  In most cases, the decedent’s estate is required to pay off their debts. More specifically, the decedent’s appointed personal representative is required to allocate the decedent’s assets in compliance with the terms of a will or, if the decedent had no will, state “intestacy” laws. The personal representative may be established in a will or, if the decedent died “intestate” (without writing a will), by the court.

Before distributing any leftover property to heirs and beneficiaries, the personal representative will pay off debts. If there is not enough money in the estate to pay the debts, the decedent’s property may be liquidated to satisfy payments.

You should understand, however, that fortunately, certain property that belongs to a decedent is considered “exempt,” which means that debt collectors cannot receive it. In many cases, life insurance policies and retirement savings fall into this class.  With a skilled estate planning attorney on your side, you can feel confident determining the status of your loved one’s possessions.

What are the exceptions?

A person who has passed away with debt will usually result in the estate being liable to pay those debts. However, there are a few important exceptions to take note of. These exceptions include the following:

  • Spouses in community property states (note, however, that PA is not a community property state)
  • Cosigners
  • Joint account holders

If you have any further questions about who has to pay a decedent’s debt, please don’t hesitate to reach out to Friedman Schuman today. Our estate planning and estate administration team has significant experience guiding individuals through each step of the process, and we are here to put that experience to work for you in your case as well. Give us a call or contact us online so we can get started working on your case.

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