Losing a loved one is difficult, and handling their finances can add stress. If your parent or another family member passes away with unpaid debts, you may worry about how to manage these obligations.
Getting a better understanding of the probate process in Texas can help you feel more prepared.
The estate handles debts before asset distribution
In Texas, when a person dies, the estate goes through probate. This legal process gathers assets, pays debts, and distributes the remaining property to heirs.
Before heirs receive any assets, the estate must first pay off debts and expenses. Common debts include mortgages, credit card bills, medical bills, and unpaid taxes. The executor, who manages the estate, ensures the estate covers these debts.
If the estate doesn’t have enough money to cover all debts, Texas uses a priority system. Funeral and burial expenses come first. Next are estate administration costs, taxes, and then secured debts like mortgages.
Creditors with unsecured debt, like credit card companies, usually get paid last. Bear in mind that creditors must follow strict rules when trying to collect on these debts.
Family members usually aren’t personally responsible for the deceased’s debts
In most cases, family members do not inherit a deceased loved one’s debt. If the estate doesn’t have enough assets to cover all debts, creditors will not receive full payment.
However, if you co-signed a loan or a credit card with the person who passed away, you may have to pay off that debt. The same applies to joint accounts or debts legally you had together.
Knowing these points about probate in Texas can protect you from unnecessary stress and confusion. For example, you can avoid getting pressured into paying debts that aren’t your responsibility. Then, you can confidently manage the probate process and ensure creditors follow the proper legal steps, too.
