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Do the Other Owners Have to Pay a Deceased Tenant in Common's Final Bills?

Understanding Solvent and Insolvent Estates and Secured Debt

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When one of the owners of property titled as tenants in common dies, the surviving owners won't be personally liable to pay off the deceased owner's final bills. Why? Because the deceased owner's estate will be liable to pay off the deceased owner's debts. But the surviving tenants in common may be forced to sell property, particularly real estate, that's owned as tenants in common. When and why depends on several factors.

Tenants in Common Property is Owned Free and Clear of Debt

If the tenants in common property is owned free and clear of any liens and the deceased tenant in common's estate has enough other assets to pay off all of the decedent's outstanding debts, then the decedent's portion of the property will pass free and clear of the decedent's debts to the decedent's beneficiaries named in his or her estate plan if the decedent had an estate plan, or to the decedent's heirs at law if the decedent didn't have an estate plan. This means that the surviving tenants in common won't be forced to sell the property but will become owners as tenants in common with the decedent's named beneficiaries or heirs at law.

On the other hand, if the tenants in common property is owned free and clear of any liens but the deceased tenant in common's estate doesn't have enough other assets to pay off all of the decedent's outstanding debts, then the decedent's creditors may be able to force the sale of a portion or all of the property in order for the cash to be raised to pay off the decedent's final bills. This will leave the surviving tenants in common vulnerable to a forced sale or partition action.

Tenants in Common Property Secures a Debt

If the tenants in common property itself was used to secure a debt, such as with a mortgage used to purchase the property, then the interests of the surviving tenants in common will be vulnerable since the secured party may be able to force the sale of a portion or all of the property in order to pay off the secured debt.

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