Q: My mom recently passed away with a paid off home (worth $500,000) but owning no cash assets. Unfortunately, she also had $20,000 of credit card debt. Will I be forced to sell her house to pay off the debt?

by | Dec 14, 2022 | Q&A, Trust And Estate Administration |

A: Potentially. The bottom-line is this: creditors have first priority BEFORE any heirs/beneficiaries receive estate assets. Therefore, since your mom’s estate is solvent, the credit card company is entitled to be paid back in full. However, since your mom’s estate didn’t have any cash, you either have to pay out of pocket (if you want to keep the house, for example), or you can sell the property and use the net sale proceeds to pay off the debt.