Legal Question in Wills and Trusts in New York

Re: will and debt

Generally speaking a beneficiary of a will will take the property as is. That means that unless the testator provided for the payment of debts and obligations associated with the property then the obligations transfer to the new owners.

So as you describe it, your answer is most likely yes.

I would need to see the will to determine if you are in that position.

I can be reached via email if you have additional questions.

Re: will and debt

Dear Sir/Madam:

Although I am an attorney licensed in Pennsylvania and not in New York, I will attempt to answer your question regarding the obligations of a beneficiary for a Decedent's business debts.

As a general rule of thumb, heirs and beneficiaries are typically not liable for the debts of a Decedent. Of course, this would be different if the heir or beneficiary actually co-signed on the debt or legal obligation.

That does not mean that the Decedent's business debts will simply go unpaid. Namely, if there are sufficient assets in the Decedent's estate, creditors may have a right to file a claim against the estate and seek to recover what they are owned.

As such, the business debts may need to be resolved before any distribution can be made to the beneificaries.

Presuming an attorney in New York is actually handling the estate in question, you should probably direct your inquiry directly to him or her.

Good Luck and Best Regards.

Re: will and debt

While I have read the comments of the other authors and generally agree with them, you have provided insufficient facts for a complete reply. How is the business you might inherit constituted? For example, is it represented by corporate shares, a sole-proprietorship or some other legal entity? Is it an operating business or real estate? If the decedent operated a business as a sole-proprietorship, the debts are related to but independent of the business. Thus, the payment would be covered by the Will language (Will has not been seen). On the other hand, if the business interest is represented by some legal entity (corporation, LLC and/or partnership) whose interest you will inherit, the debts may be inherent to the business and not the personal responsibility of the decedent. Thus, even if the Will provides for the estate to pay the decedent's debts, this language generally covers only personal debts (even if business related), not debts inherent to a business entity. While you may not have responsibility to pay them, the business would be responsible and if incapable of payment you might want to renounce the inheritance. This is a business call and more information is needed to provide a better response.

Re: will and debt

No beneficiary under a will inherits debt; if the debt exceeds the assets, the estate is insolvent (similar to a bankruptcy). In no event would a beneficiary be personally liable for a decedent's debt (unless the beneficiary was involved in the business in question)