Should I Pay Dad’s Credit Cards?

When a parent dies one of the first questions their adult children ask me is whether they are responsible for the parent’s debts. Home mortgage statements, utilities, credit cards, hospital bills and other such expenses flood the mailbox. What to do? 

Florida law answers these questions. Usually, spouses, children and other beneficiaries aren’t liable for the individual debts of a decedent. But a misstep can result in personal liability.  If you’re serving as the personal representative (Florida law’s executor) in a probate estate, or as a trustee of the deceased’s trust, you should rely on your estate attorney who knows the complex rules regarding a decedent’s creditors. If you don’t adhere to them, invoices that normally wouldn’t be your responsibility could become your liability. 

Allow me to explain. Florida law provides for the priority of creditor claims. If the decedent’s estate is sufficient to pay all the bills, then there’s no problem. But what if the estate is insufficient to pay the bills? Should the spouse or adult children or the beneficiaries come out of pocket to satisfy them?  

Here we look to the Florida statutes, which sets priorities among the bills. Expenses related to the administration of the estate (lawyers, executors, etc.) are the highest priority and stand first in line. You might scoff that the lawyers are first, but who would help administer an estate if all the other creditors consume the estate?  

Next in line are funeral expenses up to $6,000. After that, federal debts and taxes then state, including unpaid court costs fees and fines. Doctors, hospitals and attendants relating to the last 60 days illness follow, then business debts up to the value of the business assets, and finally all other debts, which might include unsecured credit cards.  

It makes sense that debt secured by assets, such as a mortgage on a home, have priority over unsecured debts. So, if there’s a mortgage on a property that wasn’t the decedent’s Florida homestead, and has sufficient equity to satisfy the creditors, it might make economic sense for the beneficiaries to carry the cost of the mortgage until the property is sold.   

The decedent’s Florida homestead is exempt from the claims of creditors so long as it is devised to an heir (spouse and children qualify). But it transfers subject to any mortgages or other secured liens. If, however, the will or trust directs the sale of the homestead, then unsecured creditors can reach its equity. The homestead equity is not protected to the extent that the homestead is devised to someone other than an heir (a friend or charity, for example).  

IRA accounts are also generally exempt from creditor claims, unless they are payable to the estate rather than to a beneficiary, in which case the account becomes subject to creditor claims.  

If the personal representative or trustee pays bills in the wrong priority, and if there aren’t enough non-exempt assets to cover those bills, he or she is personally liable to pay the claims of those that would have been paid had the proper priority been followed. So, for example, if the trustee paid the American Express and Visa bills, but it turns out that there wasn’t enough money to pay the doctor and hospital bills, the trustee will then have to come out of pocket to pay those doctors and hospitals because they had priority under the law.  

If a probate estate is opened with the circuit court, then the attorney for the file will explain the proper procedure to notify the creditors and satisfy their claims. It’s the personal representative’s duty to determine any “reasonably ascertainable” creditor. The attorney for the file will send a formal notice of the administration to those creditors, granting them 90 days to make a claim against the estate. The other creditors are noticed in a newspaper legal notice advertisement. The estate can’t be closed until all creditor claims have been satisfied, or in the case of insufficient funds, paid proportionally as provided for under the statute.  

If no probate is opened, the trustee has a period of two years where he can remain liable to creditors. That’s why it might be prudent to open an empty probate simply to run a proper creditor notice period.  

I’m sure this is clear as mud to the reader. The law is more complex than I have space to describe. That’s why it’s so very important to have a knowledgeable attorney lead you through this process.  

© 2023 Craig R. Hersch Learn more at 

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