MONTREAL – The death of a parent can sometimes mean financial turmoil for surviving relatives, but advisors say that lingering debts aren’t the responsibility of the adult children in the family.
“There is no liability for a child to take on the debts of the parents,” said lawyer Murray Morrison, who specializes in insolvency and practices in the Vancouver area.
If the parents die in debt, the first place to turn is their estate which can go bankrupt, he said.
But a bankrupt estate also means there won’t be an inheritance for the family.
“Kids do not come first,” he said. “Under the law, the debts have to be paid before anybody gets a nickel.”
So the surviving children can choose to ignore their parents’ debt and let creditors sue and garnishee the deceased mom or dad’s bank account, or they can spend what money is in the estate to bankrupt it, Morrison said.
He said surviving children should not “try to pay the bills without thinking about it” and also recommended they seek legal advice.
Debts aren’t transferred by virtue of marriage or death — not without your signature — even though spouses and children may feel they should clear up any outstanding money owed, said Margaret Johnson, president of Solutions Credit Counselling Service.
“A lot of people want to do the right thing,” Johnson said. “The right thing is to pay debts that are yours. If they’re not yours, don’t pay them.”
For example, if dad passes away but has a credit card bill and an unpaid