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Are Children Personally Liable for a Deceased Parent’s Debt in Illinois?

Article written by Illinois & Iowa Attorney Kevin O'Flaherty
Updated on
October 28, 2019

In this article, we answer the question, “are children liable for a deceased parent’s debt in Illinois?”  We answer the questions, “what is probate?”, “what happens if an estate does not have enough assets to pay the deceased person’s debts?”, “are children responsible for paying a deceased parent’s debts in Illinois?”, “when are children personally liable for a deceased parent’s bills?”, and “what happens if you cosigned or guaranteed a deceased parent’s debt?”  We also explain a child’s liability for a deceased parents debt based on a transfer of assets shortly before death and based on mismanagement of the estate.

What is  probate?

Probate is the judicial process that verifies a will as an official legal document in a court of law. As the first step of administering the estate of a deceased person, the granting of probate resolves all claims and distributions of the deceased person’s true last testament. A probate court determines if a testator’s will is or is not valid, granting approval for the “executor,” or the personal representative named in the will to dispose of the testator’s assets in the specified manner of the testator’s wishes. For more, check out: The Illinois Probate Process Explained.

What happens if an estate does not have enough assets to pay a deceased person’s debts?

Some estates’ assets are insufficient to cover the decedent’s debts; in those cases, Illinois groups the debts into certain classes, where a group then pays them off. Once one group of debts is entirely paid off, the estate can pay the next group of debts. In Illinois specifically, medical expenses are the last group of debts to be paid for by the estate. Funeral expenses, back taxes and fees, funds due to employees, and awards to the parent’s surviving spouse and children are all paid by the estate prior to it settling medical expenses. If there isn’t enough money in the estate’s assets to cover the remaining debt, it typically goes unpaid.

Are children responsible for paying a deceased parent’s debts in Illinois?

Children are not generally responsible for paying the debts of a deceased parent.  In Illinois, if an individual’s parents die with unpaid medical bills, the estate is generally responsible for paying the debt. If the estate has money and other assets, they will be used to pay the debt before anything is distributed to the heirs. So even though you’re not legally responsible for your parents’ debts, unpaid medical bills can still take a chunk out of what your parents intended to give you. You can only receive an inheritance from your deceased parents if they have enough assets in their estate to completely pay off their unpaid debts.

When are children personally liable for a deceased parent’s bills?

People can’t inherit debt. However, in Illinois, there are a few circumstances where other people besides the estate are financially responsible for paying outstanding liabilities.  These include joint debt or credit for which the child cosigned or guarantee, transfers from parent to child shortly before death, and a child’s mismanagement of the parent’s estate.

What Happens if You Co-Signed or Guaranteed a Deceased Parent’s Debt?

Adult children are not responsible for a deceased parent’s debt, unless they cosigned for a loan, credit card, or have joint ownership of a property or business. For example, contract law makes a person liable for a debt. Contracts can be implied, but there can’t be an implied contract when there’s an express one. If a person is liable for debts based on loans, credit cards, and utilities, someone else can’t suddenly become liable through conduct, like paying a bill that isn’t theirs or being a power of attorney. If you cosigned for a loan or line of credit issued to your deceased parent, you will be liable for the debt, if the assets of your parent’s estate cannot cover it.

Child’s liability for a deceased parent’s debt based on a transfer of assets shortly before death

If your parent realized his or her estate lacked the resources to pay off medical expenses and purposely transferred valuable property to you shortly before death, the doctor or hospital can sue you personally. Under Illinois law, a court could invalidate the transfer with the property going back to the parent’s estate, because the parent made the transfer with the intent to defraud his or her creditors or with the knowledge that he or she lacked the resources to pay off debts. Creditors can scrutinize property transfers to children that happened immediately prior to the parent’s death.

Child’s liability for a deceased parent’s debt based on mismanagement of the estate

If you are the executor of your deceased parent’s will, it’s your responsibility to figure out how to pay creditors by using the money and holdings in the estate. Be sure not to act careless or dishonest with your deceased parent’s assets; if you pay the wrong debts off in the wrong order, you could become responsible for reimbursing the estate for the amount of money paid to the creditor.

It is not your responsibility to pay creditors with your own money. If creditors continue to harass you and your family for payment, write a letter to the establishment or contact an attorney to write one one on your behalf. Under the Fair Debt Collection Practices Act, creditors aren’t allowed to discuss someone’s debt with relatives, neighbors, or friends.

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