After a debtor passes away, do their debts no longer need to be repaid?
After a debtor passes away, do their debts no longer need to be repaid?
Unfortunately, the debts do not automatically disappear because of the debtor’s death.
Will the family members automatically inherit the debts?
In legal terms, family members of a deceased debtor are not obligated to take on the debts.
Personal debts are personal debts and do not extend to family members.
So, does that mean the debts do not need to be repaid?
They still need to be repaid.
Section 68 of the Probate and Administration Act 1959:
If the debtor has an estate, the executor or administrator of their will has a duty to use the remaining assets to prioritize debt repayment on behalf of the deceased debtor.
What kind of debts are we talking about?
Debts may include funeral expenses, loans, legal fees, credit card debts, etc.
Is it possible to prioritize giving the beneficiaries their inheritance before handling the debts?
This would be considered improper conduct.
Creditors can sue the executor or administrator of the will to recover the assets that have already been distributed in order to repay the debts.