What debts are paid from an estate?
Before anyone inherits, the estate must settle the deceased's debts and liabilities: the funeral, mortgage and secured loans, credit cards, personal loans, outstanding bills, and any tax due. Debts are paid from the estate's assets, not by relatives personally (unless jointly liable). Beneficiaries receive only what is left after debts, expenses and tax.
Detailed explanation
Debts follow the estate, not the family — with limited exceptions.
- Reasonable funeral costs and administration expenses.
- Secured debts (mortgage), then unsecured debts (cards, loans, bills).
- Any income or inheritance tax owed.
- Relatives aren't personally liable unless they co-signed or held the debt jointly.
If the estate's debts exceed its assets, it is insolvent, and strict rules govern the order in which creditors are paid.
An estate of £200,000 has a £120,000 mortgage, £6,000 of credit-card debt and £4,000 of funeral and bills. The executor pays these (£130,000) from the estate first; the £70,000 balance is then shared among the beneficiaries.
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Sources
- GOV.UK — Applying for probate (application fee £300; estates over £5,000)
- GOV.UK — Probate fees and additional copies (£16 per copy)
- HM Courts & Tribunals Service — probate timeliness statistics, 2025
- GOV.UK — Valuing the estate of someone who's died
- Reviewed by
- ClearLegacy editorial team
- Last reviewed
- June 2026
- Next review
- December 2026
- Jurisdiction
- England & Wales
Frequently asked questions
What debts are paid from an estate?
The estate pays the funeral, secured debts like the mortgage, unsecured debts such as credit cards and loans, outstanding bills and any tax — all before beneficiaries inherit. Beneficiaries receive only the remainder.
Do relatives have to pay the deceased's debts?
No, not personally — debts are paid from the estate. Relatives are only liable for debts they held jointly or guaranteed. If the estate can't cover its debts, the unpaid balance usually dies with the person.
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