Will I become personally liable for money my parents owe IRD when they pass away?

Question Details: One of my parents owes the IRD a substantial amount of money - far more than the total worth of their estate is likely to be. Will I become personally liable for money my parents owe IRD when they pass away?

Filed under Wills/Estates | 3490 View(s)

Are you a lawyer? Login or register to answer this question.

Answers by Lawyers

Community Law Wellington & Hutt Valley

No, you won't become personally liable for your parent's debt, as long as the debt was only in your parent's name.

If your parent dies without enough money to pay off the debt, their estate will be called an insolvent estate. The estate will pay off outstanding debts in a set order (usually starting with funeral costs) before anything is given to people named in the will, or until the money runs out.

The debt owed to IRD must be repaid from the estate before any payments are made to people named in the will.

It may be helpful if your parent considers life insurance to protect their estate from becoming insolvent when they pass away.

Answered 30 Sep 2012. The IMPORTANT NOTICE below is part of this answer.

IMPORTANT NOTICE: The answer provided above is intended for general informational purposes only and cannot be considered a substitute for face-to-face legal advice. It should not be relied upon as the sole basis for taking action in relation to a legal issue. Laws change frequently, and small variations in the facts, or a fact not provided in the question, can often change a legal outcome or a lawyer’s conclusion. No liability whatsoever is accepted by the authors or publishers of the answer, for loss, damage or inconvenience arising in any way from the use of this site. While each answer has been published by a lawyer with a practising certificate, that person may not necessarily have experience in the particular area of law involved.

For more information about this website, please review our Terms of Use.