Managing the estate of a parent can be a challenge. It requires practical planning and emotional fortitude. Going through a lifetime’s worth of assets and memories can be hard for a child grieving a loss.
Needing to liquidate or sell property owned by a parent can be devastating. Unfortunately, that is often what the representatives of estates must do. You have to settle the debts that your parents still had when they died.
What debts will you have to pay on behalf of your parents during the probate process in South Dakota?
All private debts can lead to claims against the estate
Even if there are no living co-signers for the debts your parent had when they died, those creditors still have rights. So long as there are still assets in your parent’s estate, they can seek repayment by making a claim against the estate in probate court.
You may have to empty your parent’s bank accounts and sell some of their property to repay their credit cards or pay off a judgment. While you are not responsible for debts that exceed the total value of the assets in the estate, the state may require that you completely give up your own inheritance to repay those creditors.
If you retain assets for yourself or distribute them to other family members without paying off valid debts, you could be personally vulnerable to claims by those creditors. They can hold you financially accountable for the inappropriate distribution of estate assets.
Medicaid can also make claims for repayment
If your parent needed state-funded medical insurance other than Medicare in their golden years, the state may try to recover the money they invested in that care. Under the estate recovery program in South Dakota, your parent’s estate can face claims for every cent the state paid on their behalf for hospital care or residence in a nursing home.
If your parent didn’t plan ahead to protect their assets, you will have to ensure that you properly repay all creditors with a valid claim before you keep any inheritance for yourself. Understanding your responsibilities during the probate process can lead to better decision-making and less risk for you.