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Who pays a deceased parent’s debts?

On Behalf of | Jul 31, 2017 | Estate Planning & Probate

What happens to your outstanding debts, like utility bills, when you die?

In theory, the trustee or executor of the estate will see that the bills are paid before any remaining funds are disbursed to the heirs. If the estate can’t pay the bills, companies simply have to write them off as uncollectable. They can’t just decide to pursue your children for the debts. That’s an important piece of information that you need to remember just in case you ever find yourself in a dispute over a deceased parent’s bills.

For example, look at the case involving a recent Ohio woman whose water bill was suddenly increased by more than $400 — all because she inherited a home from her father when he died. The deceased had also owned several rental properties that she didn’t inherit, and several of his tenants failed to pay their water bills. In Ohio, landlords bear the ultimate responsibility for water services to their rentals, so the bills defaulted back to the deceased. Since he obviously couldn’t pay, the water company saw fit to tack the past due amounts onto his disabled daughter’s bill.

Knowing the law, the daughter was able to fight the unfair bill, and the water company eventually backed down once the media got involved, claiming that it hadn’t been informed of the man’s death.

If you want to avoid finding yourself in a similar situation, take the following steps once your parent dies:

  • Notify the utility companies of your parent’s death as quickly as possible.
  • Include a copy of the death certificate and the contact information for the estate’s representative so that the utility company has proof of the death and the proper contact information to try to collect the bill.
  • If you take up residence in your parent’s home after he or she dies, immediately have the service transferred out of your parent’s name and into yours. Don’t allow the bill to continue coming in your parent’s name, even if you are paying it.

For more information about how to handle issues involving estate administration, talk to an attorney today.

Source: WKBN 27, “Struthers woman says company raised water bill to pay dead father’s debt,” Amanda Smith, July 20, 2017