If a family member dies and leaves behind some debts, you may feel a sense of moral obligation to discharge those debts. However, you need to proceed with caution and, in particular, consider the following:
Who is responsible for paying the debts of the deceased person?
What is the correct process for settling those debts?
What are the risks of paying debts without following the proper procedure?
Debts Are Paid from the Estate, Not by Relatives
Under Irish law, when a person dies, their debts do not automatically pass to their relatives. Instead, debts are paid from the assets of the deceased person’s estate. After a person dies, their estate (or assets) is administered by a personal representative.
The personal representative is the Executor named under the will, or the nearest next of kin if there is no will. The personal representative is responsible for gathering the assets, paying debts, and distributing the remainder to beneficiaries.
Order of Priority
There is a strict order in which debts must be paid from the estate:
Funeral and testamentary expenses
Creditors with security (e.g., mortgage providers)
Preferential debts (mainly taxes and social insurance)
Ordinary unsecured debts (e.g., credit cards, personal loans)
Any remaining debts
If the personal representative pays debts or distributes assets without following the correct order or before all debts are identified, they may become personally liable for any shortfall.
Importantly, family members are not required to pay the deceased’s debts from their own resources unless they were joint debtors or guarantors.
Process for Settling Debts
Do Not Pay Debts Immediately: It is not advisable for a family member to pay off the deceased’s debts directly, especially from their own funds. The correct process is for the personal representative to gather all asset and liability details and then pay debts from the estate in the prescribed order.
Notify Creditors: The personal representative should notify all known creditors of the death. Creditors will usually pause collection until the estate is finalised.
Wait for Grant of Probate/Administration: No payments should be made until the personal representative has obtained a grant of probate (if there is a will) or letters of administration (if there is not).
Risks of Premature Payment: Paying debts out of order or before all debts are known can expose the payer (including the personal representative) to personal liability if other creditors later come forward and there are insufficient assets remaining.
Special Circumstances
If a family member is a joint debtor or has guaranteed a debt, they may be personally liable for that specific debt.
If the estate is insolvent (debts exceed assets), there are special rules, and the personal representative should proceed with caution.
There are statutory time limits for creditors to make claims against the estate (generally two years from the date of death or six years from when the debt became due, whichever is earlier).
Conclusion
A family member should not pay off the deceased’s debts directly. The proper course is for the personal representative to administer the estate, pay debts in the correct order from estate assets, and only distribute any remaining assets to beneficiaries once all debts and expenses have been settled. Premature or incorrect payment can result in personal liability for the payer.
Disclaimer
Please note that this article is for general information purposes only and does not purport to be legal advice. While every care has been taken in its production, no legal responsibility or liability is accepted, warranted or implied by the author, publishers or the Law Society of Ireland in respect of any errors, omissions or misstatement. Readers are advised to seek independent professional legal advice.
