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Who is responsible for debt when a Florida parent dies?

May 6, 2017 | Estate Planning

When parents pass away, their surviving children sometimes discover unpaid debts of which they were unaware. This often leaves the question of whether children in Florida are responsible for the debts of their deceased parents. The answer to this depends on the types of debts and whose name they are in — and then there are often exceptions to any rules.

Upon a person’s death, his or her estate becomes responsible for any unpaid debt. When it comes to credit card debt, only a child who was a joint holder on the account can be held responsible for payment. If a child is the named beneficiary of a retirement plan, creditors cannot touch it; however, if the beneficiary of a 401(k) or IRA is an estate, creditors may have a claim on it.

Debts such as Parent Plus or federal student loans are typically canceled upon death, although estates may be held liable for forgiven debt taxes. Children with student loans on which their deceased parents were co-signers may find their loans called in, depending on the terms of the loan. Lenders may seek the entire payment from the estate, or they may demand payment from the heir.

Children may want to retain the family home of which the mortgage was in the name of the deceased parent. The bank may transfer the mortgage to them, or the children can sell the property to pay the balance and share what is left. However, if the value of the house is less than the amount outstanding on the mortgage, the bank cannot hold the children responsible for the debt. Each family’s financial affairs are unique, and a consultation with an experienced Florida estate planning attorney may provide.

Source:, “Dealing With Debts After Death“, Mary Kane, Accessed on April 27, 2017