Q: My friend’s husband died recently and she has found out that he owes over $600,000 to various companies. For example, he had borrowed $ 10,000 from the firm. Since he did not pay it is now $ 31,000. Is the wife liable to pay the firm the total $ 31,000 even though she was not party to this. Also, what other advice you have for the spouse? Should she hire an attorney to deal with the finances?

A: Generally, the heirs of a deceased person are not liable for the debts of a deceased person. There are exceptions such as if she co-signed notes or agreements or in some way it can be proven that she was involved directly or indirectly in what sounds like possible a misappropriation of employer money. An estate may need to be opened. If there are insufficient assets of the husband to pay the debts, the court will discharge the claims. She should contact a lawyer. It may be wise to proactively open the estate now, so others are on notice that he is deceased, the estate and only the estate is responsible for his debts. If debts exceed assets of the husband’s estate, it will be an insolvent estate. In many ways an insolvent estate is handled like a bankruptcy in that preferred creditors will be paid first and then other creditors will be paid a certain amount on each dollar, if there is any money at all remaining to pay them after estate expenses are paid.