The will can save a lot of headaches, resolving at the will of the testator what will happen to the assets that were his in life, but what happens to the debts when someone dies, are they also inherited? In general, yes, but this does not mean that the heirs have to take out of their pocket to cover them.
As part of the month of the will, Expansión spoke with a Condusef actuary to explain in detail how these inheritances work.
Are debts inherited?
Jesús David Chávez Ugalde, director of Analysis and Statistics of Financial Services and Products, explains that the way in which a debt is inherited will depend on the financial service that has been acquired. Banking products -such as credit cards-, as well as those of Multiple Purpose Financial Institutions ( Sofomes ) carry life or damage insurance, as long as it is active, the debt is settled at the time of death.
“When there is insurance, I inherit the debt, but it is paid automatically and then it is settled, so I only inherit the property. But if there is no insurance or it is not valid, the responsibility of pay that debt,” says Chavez.
However, it clarifies that the money to pay the debt does not have to come out of the heir’s pocket, unless the heir so decides, but that the collection is made on the estate, that is, the assets of the deceased.
“Then people think that they inherit and that they are going to have to take out of their pocket to pay, and although the heir may decide to do so because he is interested in the property and has the possibility of continuing to pay monthly payments or liquidate, the reality is that it goes against the hereditary mass or what was of the deceased”, adds the specialist.
What happens if I inherit a debt that I cannot pay?
Although the institutions are obliged to provide life insurance when a loan is granted, it may be the case that the holder has not paid the insurance, so it will not be active and in the event of death the debt will not be covered immediately. .
One of the scenarios that can occur in this case is that the heir does not have the means to pay the debt even if he is interested in keeping the property. Chávez gives the example of a mortgage loan, in this case the bank can auction off the property and collect from there, if it is not enough, it is not the problem of the heir, since the specialist emphasizes that the debt is paid on the estate.
When a property is auctioned, it can also happen that there is money left over from the transaction, in this case the body that provided the credit takes the part that is owed and the rest is delivered to the heir.
Is the beneficiary the same as the heir?
Chávez explains that when signing a credit agreement, the owner designates beneficiaries that may not coincide with the heirs, in this case, the asset will remain in the hands of the heirs; the beneficiaries are there, for example, in case there is a surplus payment in the credit, in this case it is delivered to them.
“The first thing is that when you contract a loan, insurance is automatically contracted. In the contract there are a series of beneficiaries, these are not necessarily going to be the heirs. If the will says that they are other people, they are the ones who inherit, the beneficiaries are there in case, for example, that there is a surplus, for example if 3 more monthly payments were paid, then that money is returned to them. They are not beneficiaries of the asset but of the insurance, “he details.
Recommendations and reminders for the will
In addition to carefully choosing the heirs, Chávez Ugalde recommends being very specific in the assets that are inherited, this process must be carried out by a notary and will avoid problems at the time of death.
Remember that, even after having made the will, the testator remains the owner of the assets that are in his name and has full freedom to sell them, give them away or carry out any operation with them while he lives. The assets will become the property of the designated heirs until the death of the testator, so a will does not mean an impediment to dispose of the assets.
Finally, it points out that the will can be modified as many times as the testator wants and considers necessary, always in the hands of a notary public.