If a deceased person owes money when he / she dies, it is important to find out if the debt is greater than the funds in the estate. If so, the estate must be treated as a trustee. Hereby the heirs will not be liable for the debt to the creditors.
When the estate is insolvent, the heirs cannot expect any inheritance. The probate court then appoints a trustee (a lawyer) to provide for the treatment of the estate. The trustee must provide all the practicality of the estate, including that the deceased’s values are distributed among the creditors. If the heirs want to take over some of the deceased’s possessions, they often have to buy these from the estate.
If the debt does not exceed the funds in the estate, the heirs may well choose to make a private switch instead of a trustee stay. This can be done on condition that they ensure that the creditors receive their money before the heirs share the remainder, that is, the inheritance.
If there is no more than DKK 36,000 in the estate, when the expenses (for the funeral, the director’s fee and the court fee) have been paid, as well as the mortgage debt and the creditors’ possible set-offs are deducted, the treatment of the estate can be terminated by the fact that the deceased’s closest relatives receive the amount paid. The relative must not pay any other debt.
Insurance goes beyond the estate
If the deceased had taken out an accident or life insurance, the person who has been deployed as a beneficiary will be able to get the money by contacting the insurance company. The money from the insurance is not counted in the estate. The same applies to rate and capital pensions in banks. Even if the money goes beyond the estate, you usually pay the tax on the amount
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I am impartial financial advisor and help many people get clarified opportunities and rules without having to pay a fortune to a lawyer. Contact Sund Economics for advice on debt after death .