Full question:
My mother recently gave me a general power of attorney to handle her legal affairs. My Mom is over 70K in debt. Upon her death am I responsible for and do I have to incurr her debt because I have her power of attorney.
- Category: Power of Attorney
- Date:
- State: Alabama
Answer:
Generally, an agent isn't personally liable under a power of attorney as long as authority isn't exceeded or abused. A deceased's debts should be paid with the property in their estate (the property left at their death). Children don't inherit their parent's debts unless they created a co-signor/guarantor/surety/joint account relationship to the debt, so that the child's name is on the debt also, and it isn't a separate debt. We suggest you read the terms of the documents carefully to determine whether you agreed to be a responsible party. If you did and you inherit the pension assets, they could be used to pay the debt. Whether they can pursue the pension assets while she is still alive will depend on all the facts and documents involved and whether she currently has a right to the pension under the terms of the pension plan.
Only after the debts are paid will the remaining assets be distributed among the beneficiaries of the will. Be advised that when a child inherits property that is collateral for a debt -- for example, a car that is not paid for or a house with a mortgage -- the debt comes with the property. If there is insufficient money or assets to pay all creditors, then the estate must be divided up as equally as possible, with secured creditors receiving priority. This means that if the deceased parent died with little or no money in their accounts and didn't own a home, unsecured debt, such as credit card debt will not be paid to the creditors.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
