Do children inherit parent’s debts?

I was recently asked:

“A friend of my daughter told her that when a parent passes away his or her debts [banks, bituah Leumi etc] are passed on to the children even if they didn’t sign. This doesn’t seem right. Is this the law in Israel?”

And I recently answered:

“I am not a real expert in the field but this will pass as a good answer. Debts do not pass on to children, spouses etc when a person passes away. I am not making a pass at you, I am past that. The debts remain part of the estate (= izavon עיזבון) because the estate is the net worth of a person, assets minus debts. When a person passes away the inheritors inherit the estate. Inheritors could be children, other next of kin. If there are debts these must be paid before the assets are passed on to the inheritors. Children do not pay the debts anymore than passers by do, the estate pays the debts. If the assets are not substantial enough to pay the debts, the creditors just do not get paid. This is the law in most places in the world including Israel, it seems right to me. I am passionate (sorry that will really not pass for pass). An important exception is if a family member signed a guarantee (= arevut ערבות), a debt would pass on to a guarantor upon the debtor’s passing. Enough passing for now.

This is a common misunderstanding – do not pass by this link it passes for fun google.com although the results are confusing. It is past my bedtime now.

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