Yesterday, I blogged on the topic of which debts may get passed on to another individual or beneficiary after the death of an individual.

In this article, we continue this question and identify which debts generally cannot be inherited after death.

Please note: The following blog is intended to be general information only. The treatment of debts after death can often be a rather complex situation to navigate. As always, we recommend contacting us for advice that is specific to your situation.

Debts That Generally Cannot Be Inherited After Death

There are some debts that generally cannot be inherited by the beneficiaries of the estate or other individuals. These debts include:

Credit Card Debt: Credit card debt is an unsecured debt and credit cards are almost always held solely by the deceased. There is often confusion here when a third party has a supplementary card to the account. However, unless the credit card is jointly held, only the estate is responsible for paying this debt.

This debt will be paid out of the assets of the estate, if any, and is generally not passed on to a person’s spouse or beneficiaries, unless that are co-borrowers on the debt.

Car Loans Subject to a Bequest: If the deceased person had a car loan on a vehicle that is the subject of a bequest, the Succession Law Reform Act suggests that the loan will normally not be assumed by the beneficiary of the car. The beneficiary is entitled to have the car loan paid by the assets of the estate before accepting the gift.

Personal Loans and Other Unsecured Debts: Personal loans are also unsecured debts, which means that they will generally not be inherited by the heirs of the deceased person so long as the loan is not jointly held with another borrower. Other types of unsecured debts, such as lines of credit, will be treated in the same way.  

If you’re unsure about your rights and responsibilities as an executor, or as the beneficiary under a will, it’s always a good idea to consult with a lawyer who specializes in estate administration such as the lawyers of Hull & Hull.

Thanks for reading. Mark Lahn.