Who Gets the Debt? (or Financial Lesson #2 from the King of Pop)

Everybody knows that Michael Jackson leaves a legacy of debt, which has left some people wondering why there is so much hoopla about who is entitled to his estate. Actually, it's not about debt at all. MJ was responsible for creating the debt and even in death it's still his.

Debt cannot be passed on to heirs--only assets are passed on. However, assets can be depleted to pay off debt. Whatever is left over is distributed to heirs, even spouses.

But let me tell you about my personal experience. My parents divorced when I was a teen and my father remarried. He'd always been meticulously financially responsible. He built his own business, owned his house outright and had several rental properties. Then at a early age he suffered from Alzheimer's disease. His new wife new nothing about money, but was too proud to let anyone know. The business quickly failed. She couldn't manage the properties. So they were stuck. She let the health insurance laps because she couldn't afford it and so my father's health rapidly deteriorated. All the properties including the business began to fall apart. One-by-one she sold the rentals, but not the business. She took a reverse mortgage on their home. She stopped paying for oil (east coast heating). Eventually my father died. After the funeral his wife disappeared. She walked away from the house and everything.

For years while this was going on I never heard from my father or his wife. I had been living in Colorado for many years and they were in Pennsylvania. They never answered the phone, didn't return messages or letters. I assumed that his wife wanted me out of their lives. I did learn about his death and attended his funeral.

So none of my father's bills were paid--not even the funeral. Nothing was left to me or my siblings in the will, because my dad's wife wanted it that way. But creditors still contacted me. The funeral home gently wondered if I could pay the bill or at least part of it. Nursing homes that occasionally cared for my father also asked. And now, three years later I'm getting calls from a lawyer regarding my dad's house. Most of the queries are small. No government agencies, would ever think to contact me.

I am not obligated for any of my father's debts, but that doesn't mean his creditors can't ask, ever so gently. That's okay since I know to say, "No Way."