If an estate is not solvent, generally creditors of the deceased should not be paid. A decedent's debt will not be extinguished if it was a joint debt. The surviving individual will generally remain liable. Sometimes people assume the debts of the decedent. This often happens when the spouse or children of the decedent agree to pay the funeral bill for the decedent when the decedent has not fully paid it in advance. Though it varies by state, in Virginia, despite an estate being solvent, there are situations when debts do not need to be paid by the estate. These exemptions can be lost if they are not timely claimed. Virginia exemptions include the following. 1. Family Allowance – If the deceased dies leaving behind a spouse or minor children, they will be entitled to a family allowance to the detriment of creditors of the deceased, per § 64.1-151.1 of the Code of Virginia. The family allowance is in addition to any property passing to the spouse or minor children by will, intestate succession, or elective share. The family allowance must be claimed by the surviving spouse or minor children within one year of the date of the decedent's death. 2. Exempt Property – In addition to the family allowance, the surviving spouse of a decedent or the minor children of the decedent are entitled from the estate to value not exceeding $15,000 in excess of any security interests therein in household furniture, automobiles, furnishings, appliances and personal effects per § 64.1-151.2 of the Code of Virginia. 3. Homestead Allowance – In addition to the right to family allowance and exempt property, a surviving spouse of a decedent is entitled to a homestead allowance of $15,000 per § 64.1-151.3 of the Code of Virginia. Property that passes outside of probate will not be a part of the decedent's estate and is therefore generally exempt from creditor process, e.g. life insurance proceeds, retirement benefits, property held tenants by the entireties, and accounts with rights of survivorship. Like this: Be the first to like this post.
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