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What if there is no money to inherit from the estate?

On Behalf of | Aug 13, 2022 | Estate Planning |

Many people expect to inherit money when their parents pass away. But there are a lot of cases in which it turns out that there is not really any money left in the estate to inherit.

In some cases, this is simply because the parents didn’t leave any financial assets behind. Perhaps they gave to charity or gave away gifts in advance. In other cases, it’s because the parents had medical conditions at the end of their life that drained their savings. For whatever reason, you may find that there isn’t actually any money in the estate.

What happens to the debts?

Your first question probably relates to any debts that the estate has. The estate executor is supposed to pay those out of the assets in the estate. If there are no assets, then this debt will generally be eliminated and does not pass on to the children or other beneficiaries.

What about the physical assets?

The next thing to consider is that there still may be physical assets in the estate, even if there aren’t financial assets. The executor may need to do things like selling the home or paying property taxes. In some cases, assets will need to be sold so that the money can be used to pay off debt.

Plus, any physical assets that remain still need to be distributed in accordance with the will. Some of these may be family heirlooms or have little value other than sentimental value, but the will should still give you some direction regarding how your family should approach them.

If you find yourself in this situation, it’s important to know about all the legal steps you should take to accomplish these goals.