You may have questions about issues involving your assets and what happens to them after your death. You might also be wondering about your debts. What happens to them when you are no longer here?
One thing is certain – debts do not simply vanish following the death of the person they belonged to. In case you are worried about your debts passing on to your heirs, ask some questions now to get the information you need.
What usually happens when someone dies owing money is that the debts are paid by that person’s estate. Making sure that what you owed gets paid is one duty of the person you designate as your executor.
Can anybody else be held responsible for your debts?
There are some special instances that merit being aware of:
- Loan co-signer: If you have a loan with a co-signer, the debt will be the responsibility of that person.
- Car loans: If a surviving spouse co-signed the loan, they assume responsibility for it when you die.
- Home equity loans: The lender could decide to have whomever inherits the house, such as a spouse, repay the loan.
- Joint account holder: If you had a jointly owned credit card, that other person must deal with the amount that is still owed. Any authorized user(s) of the credit card do not bear responsibility for any outstanding balance.
- Medical bills: If somebody co-signed them, they could be that individual’s responsibility when you die.
These matters can get complicated. Don’t try to figure it all out by yourself. Get the facts on your particular situation so you can make appropriate plans and decisions and have peace of mind.