**Debts** (noun) — Financial obligations owed by a deceased person at the time of death, which must be satisfied from estate assets before any distribution to beneficiaries.
Debts are what someone owed when they died. Credit cards, mortgages, personal loans, medical bills, utilities, taxes—any money the deceased owed to others becomes a debt of the estate.
When someone dies, their debts don't disappear. The estate is responsible for paying them. This happens before beneficiaries receive anything. It's a fundamental rule: creditors get paid first, then beneficiaries get what's left.
Family members don't automatically inherit debts. You're not personally responsible for your parent's credit card or your spouse's medical bills unless you co-signed, guaranteed the debt, or the law makes you responsible (which varies by jurisdiction and debt type).
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Paying debts is one of the executor's primary responsibilities. They must identify all debts, notify creditors, evaluate claims, and pay legitimate ones from estate assets. This process protects both creditors' rights and the estate from fraudulent claims.
Debts are paid in priority order. Secured debts (like mortgages with liens on property) come first. Then funeral expenses and administration costs. Then taxes. Unsecured creditors (like credit cards) come last. If the estate doesn't have enough to pay everything, lower priority creditors get nothing.
You'll encounter debt issues in every estate administration. Sometimes estates are insolvent—debts exceed assets. When this happens, beneficiaries receive nothing, and creditors must follow specific rules for getting partial payment. Executors who pay beneficiaries before resolving all debts risk personal liability if legitimate creditors later appear.
**Related terms:** [Creditor](/dictionary/creditor), [Estate](/dictionary/estate), [Insolvent](/dictionary/insolvent)
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