Legal Question in Wills and Trusts in Texas

I have 2 elderly parents in their 80's who have amassed $18-20k in credit card debt. The accounts are in good standing and the minimums are paid each month at the present but we are having difficulty covering these debts along with their other living expenses. We are in the process of selling their residence which is almost entirely remortgaged, so we won't see much if any from the sale. They are now living with one of their children.They had formed a Family Trust several years ago to protect their few assets from probate and creditors but we are unclear on just how protected the assets are. We are also very concerned that upon their passing, we could become liable or be held responsible for their credit card balances. Is that a possibility?


Asked on 9/29/09, 10:36 pm

1 Answer from Attorneys
Keith Engelke Law Office of S. Keith Engelke

Your parents should consult a bankruptcy attorney and have him review the trust. The general concept is that the property in the trust belongs to the trust. Creditors can only get judgments against your parents and cannot reach the trust or its assetes. However, they may argue that the conveyances into the trust were made at the time that your parents oweed the money etc and try to undo the conveyances.

Generally, credit card debt is unsecured by any property. All the creditors can do is get a personal judgment against your parents, In texas, personal judgments are difficult to enforce unless there are non exempt assets that can be seized.

Finally, you cannot be held responsible for your parents debts after they die. However, their estates can be held responsible.

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Answered on 10/05/09, 8:54 am


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