When thinking about an estate, people often first think of a house, savings and belongings. For a proper picture, the debts must also be found. Only when both sides are known can you assess the value of the estate and which steps are safe.
Think beyond loans
A mortgage or personal loan is easy to recognise. But there may also be unpaid bills, credit card debts, tax debts, overdue fixed costs and funeral costs still to be paid. Sometimes there is a claim from children arising from the estate of an earlier deceased parent. A paper gift can also create a debt position. The exact legal treatment differs by item.
Check bank statements, tax letters, contracts and correspondence. Ask banks and other parties specifically about outstanding obligations. Also allow for amounts that are not yet final, such as tax assessments.
What if debts exceed assets?
Do not accept the inheritance unconditionally in haste. Beneficial acceptance can protect against a shortfall, but then the estate must be settled according to the rules. Creditors have a different position from heirs who already want to divide goods.
The Inheritance Guide helps collect financial information and build an overview of assets and debts. Ask legal advice when debts are unclear or when you are unsure whether to accept.