Sitting around a backyard fire the other night , drinking a Beer and talking about things . The conversation turned to finances , debt , inheritance , etc. My friend said that at his age ( 65 ) , he didn't care if he carried any debt when he died . Why pay off a Credit Card , just pay the monthly minimum . He said " As long as I can live comfortably and have a positive cash flow every month , why does it matter if I'm debt free or not " ? He has a couple of kids but they are doing fine themselves . He's not a rich man so we're not talking about a lot of assets anyway . Long story , short he's not concerned about his kids inheriting anything and he doesn't care if the creditors get stuck with his debt . I know he sounds selfish but that's the way he feels and there was nothing I could say that would change the way he looked at things .
Interesting conversation with a friend of mine .
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Sounds OK to me - his decision to make. The debtors will get first crack at any assets he has. If he has none, then its up to them if they lend him money or not.
When my mom passed we got stuck with paying off her debts. The creditors would not stop hounding us.
Yeah, that attitute is one reason things cost so much. Some people say, "I don't care" while others say, "It's my responsibility."
Why were you stuck with her debts ?
I think that the estate has to pay all debts first. That is, all property sold and the proceeds go to debtors first.
IMHO, he's screwing over his kids....
IMHO, he's screwing over his kids....
State laws....
Yeah , I understand that part of it . My wife delt with the massive debt that her parents had when they passed . She negotiated with the creditors . Take 30 cents on the Dollar or get in line and possibly get nothing . It worked . I don't remember all the details but the kids were able to sell the house and split a small settlement .
Please explain how children are required by law to pay off a parent's debt.
I would say I'm not aligned with his thinking but it is his choice... I work hard for my money (IMO), and hate paying interest so I carry no debt other than my mortgage I am working to get rid of. Again to each their own, but it is interesting to see how others look at things.
Just my $0.02
Just my $0.02
@wwillson I think you are asking a rhetorical question but here's my take... The children aren't required to pay off the debt unless they are co-signed on any of the debt. The other option might be if the "children" are the executor of the estate and acting on behalf of the estate. A stretch but that's all I can think. The estate pays the debts if there is money and then the creditors get the shaft if there is nothing left...
just my $0.02
Here's a quick search result of Indiana, where I'm from;
Disclaimer; I'm not a legal advisor/lawyer/any other law know it all. In regard to this topic, I'm just the husband to my wife, who's had to settle the estate of her parents.
The Indiana Probate Process
Probate Process in 7 Steps
Settling an estate in Indiana requires following specific guidelines. It is important to meet the deadlines and complete all the steps in the process.Step 1
The Executor of the estate files a petition with the court to open probate.Step 2
The court appoints an Executor of Estate or Personal Representative.Step 3
The Executor of the Estate notifies the heirs and publishes notice of probate for creditors.Step 4
The Executor takes inventory of all assets of the estate and appraises their value.Step 5
The Executor pays the debts of the estate, including any money owed to creditors who file a claim against the estate. If assets must be sold to pay the debts, the executor will need to get approval from the court for the sale.Step 6
The final tax returns are filed and any taxes are paid from the estate.Step 7
The assets of the estate are distributed to the heirs and probate is closed.ProbateADVANCE
Learn more at www.probateadvance.comThat's a great point.
Still, executors are not responsible for the debt of the estate.
The Executor pays the debts of the estate with the assets of the estate, not the executor's personal funds. If the executor was personally liable for the debts of the estate, think about how many people would name someone they didn't like as their estate's executor?
That was the very first thing I told him . He said " I raised my kids . They don't need my money . They're doing fine . " . He was unwavering .
Said the lying debt collectors. There are laws to protect YOU from that harassment.
The only reason to do that is if you were trying to keep some of her assets like property. The debts go against the estate. You were in no way liable for them , unless you cosigned.
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I presume the credit collection agencies will likely call anyone they have a phone number for in hopes they can get some money? Obviously debt servitude / or passing debt servitude on to children went away in 1776.
Very important to have the proper beneficiaries for: Payable on Death / Transfer on Death for all financial accounts such as bank accounts , 401K, IRA, etc..,
Joint Tenant with Rights of Survivorship is extremely powerful if you have the right family members selected.
Yes, all debts and taxes need to be settled, not to mention one last tax return filed for the deceased family member.
Joint Tenant with Rights of Survivorship is extremely powerful if you have the right family members selected.
Yes, all debts and taxes need to be settled, not to mention one last tax return filed for the deceased family member.
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