A question I often get asked when discussing the consequences of the death of a parent is: Am I responsible for my parents’ debt when they die? The quick answer to that question is…..no.

Whether your parents have an estate plan or not, if they die with debt in THEIR names, there is a legal process that should be followed. Firstly, if the parent died with assets that are not in a trust, depending on their assets and the amount, a probate case needs to be opened with the county court where the parent was residing at the time of his or her death. After a probate case has been opened, then an ad in the local paper must be run once a week for three consecutive weeks to notify all creditors of the death. Additionally, known creditors must be placed on notice directly by the administrator of the estate.

After the death notice has been published and notifications made, creditors may make claims against the estate to ensure they get paid. Whoever is the administrator of the estate is responsible for making all payments to creditors with valid claims. The payments are made from the assets in the estate.  Creditors have six months from the date the first ad runs in the paper to file claims against the estate. If there are more debts than assets, creditors will only get a pro-rata payment depending on what class of creditor they fall into per the IL probate statute.  Neither the estate, nor the administrator personally, will ever be responsible for coming up with the difference.

The only situation when a child may be responsible for the debt of a parent is if you co-signed on a loan with your parent(s). Then you would be responsible for paying off the loan either upon the parent’s death or if they stop making payments.

If you have any questions regarding completing an estate plan for yourself or an aging parent, or if you are the administrator of an estate, please contact us with all of your questions. We are here to help solve your problems.