It sounds like the punchline to a bad joke:

“Congratulations! You’ve inherited your parents’ house… and their $400,000 mortgage.”

In Florida, inheritance is supposed to be a moment of closure — a passing of legacy, love, and, yes, sometimes wealth. But for too many families, it’s also a minefield of unexpected obligations, emotional landmines, and legal headaches. One wrong step, and you might inherit more stress than assets.

At Welch Law, PLLC, we see it all the time: families blindsided by the financial reality of death. Probate court doesn’t hand out sympathy — it follows Florida statutes, creditor deadlines, and asset structures with brutal efficiency. If your loved one died with debt, you may not personally “inherit” it, but you could inherit its consequences.

Let’s unpack the fine print of when heirs can end up stuck with debt — and how smart estate planning can keep your family from inheriting a financial mess.

First, the Golden Rule: Heirs Are Not Personally Responsible for the Deceased’s Debts

Let’s make this clear up front:

📌 In Florida, you do not automatically inherit someone else’s debts just because you are their child, spouse, or heir.

When someone dies, their estate — meaning the property, accounts, assets, and personal belongings they leave behind becomes the legal entity responsible for paying outstanding debts.

Creditors line up. Probate court steps in. If there’s enough in the estate to cover the bills, the debts get paid before heirs see a dime. If not, some debts die with the debtor.

But before you relax — the details matter. Some debts come with strings attached. And some of those strings are tied to the assets you thought you inherited free and clear.

Not All Debts Are Created Equal: Secured vs. Unsecured

There are two types of debts when it comes to inheritance:

🔒 1. Secured Debts

These are tied to a specific asset - like a mortgage on a home, or a car loan on a vehicle. If you inherit the property, you may also be inheriting the debt, or at least its consequences.

Example:

Your mom dies and leaves you her waterfront home in Jupiter. There’s a $325,000 mortgage still owed. You have two choices:

• Keep the house and continue making the mortgage payments.

• Sell the house, pay off the debt, and pocket the equity, if there’s any left.

You’re not personally liable to repay the loan, but if you want to keep the asset, the loan needs to be paid. If you can’t or don’t, the lender can foreclose.

💳 2. Unsecured Debts

These include credit cards, medical bills, and personal loans. They’re not attached to specific assets.

In Florida, creditors of these debts must file timely claims during probate. If the estate has assets, those debts get paid from the estate before heirs inherit anything. If the estate is insolvent? The debts go unpaid. Heirs don’t have to reach into their own pockets.

5 Situations Where Debt Does Affect Florida Heirs

Even though you usually don’t inherit debt directly, there are important exceptions and indirect ways you can get stuck holding the bag:

1. You Co-Signed a Loan with the Deceased

Co-signing is a trap. If you co-signed a loan for your parent, sibling, or child, you are just as liable for the debt as they were — even after their death.

Example:

You co-signed a $40,000 car loan for your son. He passes unexpectedly. That loan becomes yours, full stop.

2. You Inherit Property with Secured Debt

We touched on this, but it’s worth repeating. Inheriting an asset with secured debt doesn’t obligate you personally to pay — but the debt sticks to the asset. Want to keep the family home? You’ll need to take over the mortgage. Want to keep your dad’s restored ’67 Mustang? Better plan for the car loan.

3. You’re in a Community Property State (but Florida is NOT One)

In community property states (like California, Texas, or Arizona), a surviving spouse may be liable for a deceased spouse’s debts incurred during the marriage.

Good news: Florida is not a community property state.

Bad news: That doesn’t mean a surviving spouse is in the clear — especially if they are joint owners on an account or if estate planning was sloppy.

4. You’re a Joint Account Holder

If you’re a joint credit card holder — not just an authorized user — you’re still on the hook. Credit card companies love this trick. They’ll come after the living co-holder for the full balance, regardless of who racked up the charges.

5. Creditor Claims Reduce or Eliminate Your Inheritance

Even if you don’t inherit debt directly, creditor claims can devour your inheritance.

Example:

Your grandmother passes and leaves a $500,000 estate — including her condo in Palm Beach Gardens. But she also had $200,000 in credit card debt, $100,000 in medical bills, and $50,000 owed to Medicaid. After the dust settles and legal fees are paid, you’re left with far less than expected — or possibly nothing.

Probate: Where Inheritances Go to Get Reduced

Probate is the court-supervised process that validates the will, settles debts, and distributes what’s left. In Florida, this is where debt and inheritance collide.

Timeline:

• Creditors typically have 90 days to file claims after formal notice.

• The Personal Representative (executor) must pay valid debts in a statutory order of priority.

• Only after debts are paid do heirs receive what’s left.

If the estate is insolvent (debts exceed assets), Florida law provides a priority ladder:

1. Administrative expenses

2. Funeral costs

3. Medicaid recovery

4. Taxes

5. Secured creditors

6. Unsecured creditors

Heirs fall after all of those. Ouch.

When Saying “No Thanks” to an Inheritance Is the Smart Move

Yes — you can disclaim an inheritance. And sometimes, you should.

Let’s say you’re offered your father’s condo… along with a massive HOA lien, a reverse mortgage, and a property tax bill in arrears. You’re not required to accept the inheritance.

By filing a qualified disclaimer under Florida Statutes Chapter 739, you can refuse the asset entirely — letting it pass to alternate heirs or revert to the estate.

This must be done within 9 months of the decedent’s death, and before you accept any benefits from the asset.

Planning to Keep the Debt Out of the Picture

Here’s where we shift from “reactive” to “proactive.” The best time to address inheritance-related debt is before someone dies.

🔐 1. Use Revocable Trusts

Assets held in properly funded revocable living trusts can avoid probate — and may be less exposed to creditor claims, depending on timing and structure.

💵 2. Strategic Use of Life Insurance

A life insurance policy payable directly to heirs — not to the estate — can provide fresh liquidity to offset debts or protect the family home.

🏡 3. Homestead Protections in Florida

Florida’s constitution provides powerful protections for primary residences. The homestead exemption can shield a home from most creditors, although mortgage lenders and tax authorities are exceptions.

📑 4. Pre-Mortem Debt Negotiations

In some cases, clients nearing the end of life work with us to negotiate or settle debts, cancel lines of credit, or re-title assets to minimize exposure.

🧠 5. Estate Liquidity Planning

If your estate includes high-value illiquid assets (like real estate or a family business), estate planning must consider how debts and taxes will be paid. Otherwise, heirs may be forced to sell prized assets to pay bills.

What Florida Beneficiaries Need to Know

If you’re named in a will or trust, don’t rush in blind. Some inherited assets are more curse than gift.

Ask yourself:

• Is there debt tied to this property?

• Am I a co-signer or joint owner?

• Is this asset part of probate?

• What’s the full financial picture?

Then ask an attorney.

The Role of a Probate Attorney: Your Legal GPS in a Messy Inheritance

At Welch Law, PLLC, we help Florida families:

• Navigate creditor claims

• Understand rights and responsibilities as heirs

• File disclaimers where appropriate

• Retain assets like family homes — without taking on unmanageable debt

• Structure plans that protect surviving spouses, children, and family legacies

We’ve seen Jupiter families lose generational wealth because of sloppy planning. We’ve also helped families keep the house, save the family business, and walk away from unnecessary liabilities.

Final Thoughts: Don’t Let Debt Derail Your Legacy

Death is inevitable. Debt doesn’t have to be.

If you want to protect your family from probate headaches, asset loss, and debt-laced inheritances, start with a Florida-specific estate plan. At Welch Law, we don’t just prepare documents — we preserve legacies.

✅ Key Takeaways:

• Heirs generally don’t inherit debt — but assets may be sold to pay off the estate’s creditors.

• Secured debt (mortgages, car loans) stays with the property. If you want to keep it, you must deal with the debt.

• Exceptions exist: Co-signed loans and joint accounts create personal liability.

• Florida is NOT a community property state, but surviving spouses still need careful planning.

• Use trusts, life insurance, and disclaimers strategically.

• Legal guidance is essential. An experienced Jupiter probate attorney can protect your inheritance — or advise when to walk away.

By:  Edward J. Welch, Esq. ||| Estate Planning | Wills | Trusts | Asset Protection | Welch Crypto Trust™

If you would like to discuss your legacy options with an estate planning attorney in Jupiter or Palm Beach Gardens, Florida, schedule a complimentary call with Edward J. Welch at Welch Law, PLLC.  At Welch Law, WE WANT TO DRAFT YOUR LEGACY!

Reference: Investopedia (May 14, 2025) “Can You Inherit Debt From Your Parents?”