What happens to my debts when I die?
- They are paid by selling your assets. This is the job of your executor.
- The executor has to determine what are your assets and what are your debts. He/she must sell your assets, pay your debts and distribute the balance according to your will.
- your home may have to be sold to pay your debts unless there are other assets available.
- As part of an application for probate, your executor is required by law to advertise that he is going to apply for probate or your estate and invite people to make claims in your estate. The solicitor would normally arrange this advertising. If you look in the legal pages of the Sydney Morning Herald you will see such ads.
- if your debts exceed your assets, they can't be paid. Your next of kin are not responsible for your debts (unless they have guaranteed them somehow).
- your executor is personally liable for any income tax you owe.