wills and liability for debts

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wills and liability for debts

I have a car that I owe 7000 on? With or without a will, does my beneficiary to my ira and pension have to pay for this debt?

Asked on May 27, 2009 under Estate Planning, Tennessee


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

Depends on with a will if you say assume debt -- then yes.  But then your beneficiary has a right to refuse the gift, devise, etc. So, let's say you owe money on the car...the lender cannot come after the beneficiary, but the lender can sure sue your estate.

Further, there may be something in your contract concerning this very matter.

Review the following:

1. https://law.freeadvice.com/estate_planning/wills/149/

2. From freeadvice.com:

What is probate?

Probate is the process by which legal title of property is transferred from the decedent's estate to his/her beneficiaries. Since you can't take it with you, the court determines who gets it.

If a person dies with a Will ("testate"), the probate court determines if the Will is valid, hears any objections to the Will, orders that creditors be paid and supervises the process to assure that property remaining is distributed in accordance with the terms and conditions of the Will.

If a person dies without a Will ("intestate"), the probate court appoints a person to receive all claims against the estate, pay creditors and then distribute all remaining property in accordance with the laws of the state. The major difference between dying testate and dying intestate is that an intestate estate is distributed to beneficiaries in accordance with the distribution plan established by state law; a testate estate (after payment of debts, taxes and costs of administration) is distributed in accordance with the instructions provided by the decedent in his/her Will.

The cost of probate is either set by state law or by practice and custom in your community. The typical cost to probate an estate is in the range of 3% to 7% of the total estate value.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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