Can Creditors Take My Deceased Father's House?

People die still owing money to creditors. The estate of a deceased person includes more than just liquid assets; a home, a car and stocks are examples of non-liquid assets in an estate. While the laws of the states recognize the right of creditors to be reimbursed, no creditor may swoop in and take a deceased's house. The paying of debts and distributing of property to beneficiaries happens in probate court.

Probate

When a person dies, his estate goes into probate. Probate refers to the process of figuring out who gets which parts of the deceased's estate. This is true regardless of whether he wrote a will, but estates with complete wills are easier to settle in probate. Some laws regarding what happens in probate vary from state to state. For example, some states require a death notice being posted in the local papers to alert possible creditors that a debtor's estate is in probate.

Will

In general, the probate courts seek to pay off any debts that the deceased owed and to distribute the property and assets in the estate in an appropriate fashion. The will, if there is one, specifies how things will be distributed. If there is no will, or if there is an incomplete will, then local laws determine how property is distributed.

Personal Representative

A personal representative is named in a will. If there is no will, or the deceased failed to name a personal representative, one is chosen by the court. The personal representative goes through the debts and assets of the estate. He is responsible for getting all debts to creditors paid and distributing what is left among the beneficiaries.

Abatement Statutes

Sometimes the estate cannot cover all of the debts of the deceased. The inheritance of the beneficiaries may be lowered so that creditors may be paid. The decision to decrease an inheritance is an abatement.

References

• Dummies: Probing Probate