However, you said, 'estate', which can be sent into receivership due to defaulting on loans. So your assets may be seized before they are transferred to the next generation.
But the debt itself is certainly not transferable, unless your descendants have co-signed on a loan.
In Austria, you can opt-out and have 2 more choices: inherit "unconditionally", which means you inherit before even knowing the net worth / debt status (creditors may surprise you with bills afterwards - it happened to me personally, an uncle demanded €25k for nursing my mother after she had died), as well as "conditionally", which means creditors get a time frame for disclosing their demands (demands made later are void) and at the end you know exactly what the net worth/debt is and you can choose not to inherit it (this takes longer and is more expensive).
It wouldn't surprise me too much if it wasn't true, as there were other things she said and did that didn't seem completely honest and straightforward, but I didn't see any reason for her to lie about that.
That will do it. That "something" was probably an agreement to co-sign the loan, and thus making it her sole responsibility if the other party fails to pay.
The reason lenders ask for cosigners is because the would-be debtor is a poor credit risk. They want someone to go after in the likely event that the person stops servicing the debt.
Never, never cosign someone else’s debt. Yes, here come a million and one what-ifs for this and that goofy situation. Don’t do it.
It's a deceptive and despicable scam, but I'm not a lawyer and I don't know the legalities of it. I suspect, in most jurisdictions anyway, it's not legally enforceable and she could probably have refused to pay anything and the creditor wouldn't have a leg to stand on.
Either that or she was a cosigner and her mom probably was not straightforward with her about what she was getting into when she cosigned. Shitty parents do that sometimes.
In Japan during the heyday, you could take out multi-generational mortgages.