The following question was submitted to John Roska, an attorney/writer whose weekly newspaper column, "The Law Q&A," ran in the Champaign News Gazette.
Can others be liable for my debts after I die? In particular, if I make someone my power of power of attorney, to help pay my bills, will they have to repay my debts after I die? I don’t want to burden anyone with my debts.
No. People don’t inherit debt. Helping you pay your bills doesn’t make someone liable for those bills.
Contract law makes someone liable for a debt. A basic contract requires an agreement between two parties. Generally speaking, only those two parties are obligated.
For instance, in a contract for a loan, or for credit, the creditor agrees to lend money, or extend credit, and the debtor agrees to repay. Outsiders to the contract aren’t liable. Only some new contract can make them liable.
There can be implied contracts, based on conduct and reasonable inferences, that are just as legal and enforceable as express contracts. It’s an implied contract, for example, that makes a restaurant customer liable for paying the bill. There’s no express contract to pay.
With rare exceptions, there can’t be an implied contract when there’s an express one. So when you’re liable for debts based on express contracts—loans, credit cards, utilities—someone else can’t become liable through conduct like paying a bill for you.
They could make their own, separate agreement to become liable for your bills. But that requires an express contract, clearly setting out their agreement to repay your creditor. The act of paying your bills, or otherwise helping you, isn’t enough.
Being your power of attorney doesn’t change that. You as the principal just authorize your agent to spend your money for you. They’re not promising to pay out of their own pocket.
And, most importantly, a power of attorney terminates upon your death. Without a principal, there’s no agent, because there’s no more authority.
Serving as your power of attorney, then, won’t make someone liable for your debts.
The one exception to being liable for another’s debts is with spouses. Then, what lawyers call the Family Expense Act makes one spouse liable for another’s debts when a debt is for a family expense. Even if only one spouse signs a contract, the law presumes that both spouses agree to pay for a family expense.
It’s not always clear what’s a family expense, but cases have said that the following are: medical bills, funeral bills, clothing, jewelry sometimes, rent for the family home, carpeting for the family home, and wages for a domestic servant.
Money loans, however, are not a family expense. The debt has to be for buying specific goods or services.
Liability under the Family Expense Act is based on being a spouse. One spouse’s liability for the other’s debts can survive their spouse’s death, but began while they were alive, simply because they were married.
Finally, making someone your executor doesn’t make them liable for your debts. They only have to repay your debts using the assets of your estate. If those assets aren't enough, the executor isn’t personally liable, and the debts simply go unpaid.