Early Termination of Auto Lease Due to Death

The death of a family member or loved one often creates a mountain of work for the deceased's executor or administrator of the estate, including settling the estate's debts. A lease for the deceased's car constitutes one such obligation.

Estate Debts Generally

Most debts don't die with the obligor. Creditors of the deceased during his lifetime will have a claim against the estate after his death. As an auto lease is an obligation to pay a certain amount of money over a period of time, the lease is a debt of the estate.

Early Termination Clauses

The lease contract will specify the conditions under which either party--including an estate--may terminate a lease. The early termination clause may contain a lease termination penalty, which can apply even if the lessee died.

Effect of Early Termination

The lease company generally has the right to demand the total amount of the remaining lease payments from the lessee's estate. If the estate has assets and the lease company will not agree to an acceptable termination arrangement, it may benefit the heirs to continue paying on the lease.