Overview of Inheritance and Debts: What Heirs Should Know
The transfer of property through inheritance comes with responsibilities. When a person inherits, they also inherit the debts recorded at the moment the transfer takes place. A key point is that an heir cannot partially accept an inheritance. To avoid dealing with the deceased’s debts, the inheritance must be declined in full and the property not accepted at all. This is the guidance given by Svetlana Korabel, a managing partner at YUS KOGENS, who specializes in inheritance planning.
Experts explain that the debts included with the estate are those that existed on the date the inheritance is opened. Some obligations, however, do not pass on to heirs. Debts linked to the debtor’s personal circumstances, such as alimony, end with the death of the testator. If a debt can be settled without the debtor’s personal involvement, it may continue to exist for the heirs.
Consider a scenario where the testator borrowed from a bank and then passed away. Under the loan agreement, the heir must repay the funds received by the decedent and pay any accrued interest according to the terms. It is important to note that this responsibility typically does not apply before the inheritance is formally accepted. Generally, banks cannot impose new conditions, penalties, or interest until the inheritance is entered into by the heir, which usually happens within six months after the testator’s death.
All heirs who accept the inheritance are responsible for the decedent’s debts. The heir is jointly and severally liable, meaning all heirs together bear the obligation. Each individual is responsible only to the extent of the inherited property’s value. Creditors cannot claim more than what is in the estate.
If the inheritance is not processed before it passes to the heirs by operation of law, the right to inheritable property still transfers. In that case, the new heir receives both the right to the estate and the accompanying debts. If the deceased had personal debts of their own, the inheritor is not required to repay those debts from the estate they received through inheritance transfer.
To illustrate, imagine a grandfather leaves an estate to his son along with debts. If the son dies and leaves an inheritance with his own debts, and the grandson receives the estate after the father did not complete the inheritance process, the grandson ends up with the grandfather’s debts and the son’s debts. The grandfather’s debts are settled from the grandfather’s estate, while the son’s debts are addressed from the son’s estate, if applicable.
In all cases, whether dealing with hereditary or ordinary inheritance, creditors can only claim the amount that corresponds to the value of the inherited property. If debts exceed what is inherited, a simple option exists: decline the inheritance entirely. This means not filing an acceptance with the notary and avoiding any actions that might be interpreted as an entry into the inheritance. It is essential to remember that an heir cannot take the inheritance in part; full acceptance is required by law. Additionally, non-heirs cannot be held liable for the estate’s debts. Heirs are those named to receive the estate as stipulated by the will.
For further guidance, a real estate expert explained how a borrower selects the appropriate mortgage option. This helps clarify the practical steps involved in handling inherited property and the related financial obligations.