Angela C. Artherton

Caring and Client-Focused Advocacy

Are the children responsible for a deceased parent’s debts?

On Behalf of | Jun 27, 2024 | Estate Administration

When a person passes away, managing and settling their debts can be a major concern for surviving family members. Specific laws govern the responsibility for these debts, particularly when it comes to the children of the deceased. Understanding these legal stipulations can help families navigate what is often a complex process.

Who’s responsible for the debt?

There are three main considerations for debt management for a deceased family member.

For one, you must consider estate responsibility. Arkansas law processes a deceased person’s debts through their estate, not the children. The estate pays outstanding debts by using all assets left by the deceased.

Next, you should understand the order of payment.  The law prioritizes certain debts. The first priority is debts such as funeral costs and taxes. Any remaining assets are then used to pay additional debts.

Third is the potential for insufficient estate assets. If the estate doesn’t have enough assets to cover all debts, it is considered “insolvent.” Still, children are generally not required to use their own funds to cover these shortcomings; these debts instead remain unpaid.

Exceptions and considerations

Not every circumstance results in surviving children not being responsible for the debts of the deceased. There are some specific cases where the financial burden can fall onto the children.

For example, if any of the children co-signed on or jointly held debts with the parent, the other party may need to pay. When the parent passes, the payment and balance remaining become the responsibility of the surviving family member who co-signed on the debt.

Spouses may be responsible for the medical expenses of the deceased. Under the doctrine of necessaries, a spouse may be responsible for paying these debts, however, this doesn’t usually extend to children. There may be exceptions if a child specifically agrees to be responsible for such debts.

Practical tips for handling debt after death

If you find yourself managing a parent’s estate, consider reviewing their will and estate plan. This is beneficial when assessing distribution and debt repayment.

Additionally, it can be helpful to inventory the estate’s assets and debts. Knowing what’s owed and owned can give you peace of mind.

If you have any questions about the estate or how to address your parents’ wishes, consulting with an estate administration attorney can provide useful guidance.

Moving forward with clarity

Settling a parent’s debts after their death involves emotional and financial struggles. However, knowing that children are generally not liable for these debts in Arkansas can provide some relief. By knowing the process surrounding estate administration, the family can manage their loved one’s estate with confidence.