One of the most common questions that is asked of elder law attorneys in Birmingham and around the country is what happens to an elderly person’s personal debt after they pass away. When caring for loved ones during their last days of life, it’s not an enjoyable thing to have to think about. And while it can seem unfair for anyone, especially the next of kin, to have to take on someone else’s debt obligations, few would disagree that it would be equally unfair for creditors to not be paid the money they are due. Handling these kinds of delicate situations is something that should be left to qualified experienced legal representatives.
In several counties throughout the state of Alabama, debts are typically paid from the deceased’s estate provided that estate is solvent. This means that as long as the total value of that estate is equal to or more than the total amount of debt owed, the debt can be paid from the estate. Once the debt is fully paid, the remaining assets can be handed down to heirs. This of course then begs the question “what if the estate is insolvent?” IN a situation in which the total value of the estate is less than the total debt owed then attorneys will have to work with the deceased’s family members or personal representative in order to determine which debts should take priority in being paid and which ones should not.
In Birmingham and all over Alabama, heirs of insolvent estates are not entitled to any part of that estate regardless of whether or not a written will said otherwise. However, if there is any “upside” to this situation it is that the heirs will not be required to take on the debt. Nevertheless, there are some costs such as elderly care or nursing home costs that will in fact become the responsibility of any adult descendants.
