Can organizations like the IRS, banks, or credit card companies sue or force their children pay the debt? We have a parent who may be in such a situation; so without sounding incredibly cold hearted (we do love this parent very much, for the record) how do we protect ourselves in the future from this occurring? The parent has multiple children from a mixed family, i.e. there are half-brothers and step brothers etc., however we are easily the most financially sound of them all. P.S. No one is going to pass-on anytime soon.What happens if a parent dies and their estate cannot pay for the balance of their debt?
Children are not legally or ethically liable for their parent's debt, although debt collectors will try to make you think you are. The only exception is if you cosigned a loan or credit card with them.What happens if a parent dies and their estate cannot pay for the balance of their debt?
If the parent is in pretty good health, an idea could be to get life insurance out for the parent and the children can pay the premiums each month. That way the children will get some money when the parent passes on. Premiums are pretty high when you get older, so the parent may not be able to afford the premiums on his/her own.
The parent need to get some life insurance. This will help pay for the debt that they have once they pass away. Another source of income is their retirement plan. I would say the best way to avoid this is to have the debt paid off ASAP.
well unless they sign the co lessee on the loans and dept they can't collect from the children they can however take all that's left of the estate. (ps if that parent is marry at the time of death then the spouse if responsible for the dept.)
also if their name is on any tittles (house car etc) the collectors have the rights to collect it even if they are only partial owners.
You shouldn't be tied to the debt unless you cosigned something making you responsible .when your parents die then the debt should either be wiped out or her assets will pay for it or something like that.
They cannot. You are only responsibile for what the estate can pay.
The children are not responsible for the debts of the parent. However, the decedent's estate is an entity which can be taken to collection or sued. The executor of the estate would have to publish a public notice of intent to settle the estate and then handle any claims against the estate.