Friday, June 15, 2007


From time to time we get calls from people whose spouses have recently passed away and left a whole lot of debts. It’s an unfortunate situation, as the caller is placed under unnecessary financial worries at a time when he or she is still coming to terms with to deal with his or her bereavement. More often than not the deceased has left no will, the assets are meager, and the caller is very worried about his or her responsibility for the debts.

When a person passes away, everything they owned becomes their “estate.” This includes money, bank accounts, personal and household effects, real estate, and anything else a person may own. The estate is managed by personal representative of the deceased, called an “executor” if appointed by a will, or an “administrator” if not. This process is called “probate.” The personal representative must use due diligence to determine what assets and liabilities the estate has, and he or she must use the assets to pay off the liabilities, including funeral costs, taxes and other debts. After liabilities are paid off, the remaining assets must be distributed to the beneficiaries as set out in the will, or if there is no will, then as set out in the Estate Administration Act.

However, if the liabilities are equal to or greater that the assets of the estate, the creditors just have to write off the balance. Provided that the personal representative has exercised due diligence in carrying out his or her duties, he or she has no personal liability for the debt, unless it was a debt held jointly by the deceased and the representative.

For more information and resources on probate, check out LSS’s LawLINK website at:

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