The term liabilities refer to any Debt or other financial responsibilities owed by a deceased person at the time of their death.
Liabilities can include a wide range of expenses, such as outstanding credit card balances, mortgages, personal loans, medical bills, Funeral expenses, taxes, and any other financial obligations the deceased person incurred during their lifetime.
After a person's death, their Estate becomes responsible for paying these liabilities and debts. This is part of the Estate Settlement process; all debt and liabilities need to be documented and paid before Assets can be distributed to Heirs and Beneficiaries.
If the estate does not have enough money to pay its outstanding debt, then it is considered Insolvent.
In this situation the person authorized to settle the estate, the Executor or Administrator, will need to sell estate assets, like real estate property, personal possessions and valuables, to be able to pay the debt in full.