More and more seniors are winding up dying broke and/or heavily in debt. If you are an adult child of an aging parent, you might be named as the executor of your parent’s estate. When they die without resources and owing plenty, you can find yourself in a financial mess.
Creditors will start coming out of the woodwork demanding payment. Some of the more unethical types may try to convince you that you are responsible for your parents’ debts. That is rarely the case unless you co-signed a loan for them or shared a credit account. Don’t let yourself get talked into paying debts out of your own pocket.
What happens with an insolvent estate?
If your mom or dad was truly indigent when they died, there is no reason to probate an insolvent estate. You can distribute any personal and sentimental possessions that had no real value to their heirs according to their directives in their last will and testament.
The problems lie with the creditors. You will need to explain to each one, often multiple times, that your parent has died and there are no assets or resources. Keeping meticulous notes about who you spoke with and when and the gist of each conversation will be useful.
Some assets may bypass the probate process and go straight to the surviving spouse or the heirs. Resources like life insurance policies with named beneficiaries and payable-on-death bank accounts do not need to be probated and are not part of the estate.
If you are concerned about any issues or need clarification on any questions regarding probate, you can speak to a probate attorney in Cocoa to learn more.