Many adults have debts throughout their adulthood. One question many don’t think about is what’s going to happen to those debts when they die. If you have any debts, including ones such as credit card bills or mortgages, your estate will likely be the entity to handle them.
The administrator of your estate will put out a notification that allows creditors to come forward if you have an outstanding balance with them. Those debts are paid in an order set by law. If there’s money or assets to liquidate in the estate, the estate can pay them. It’s possible that some debts won’t be paid, which is the case if the estate is insolvent.
Are your loved ones ever responsible for your deaths after you die?
Because California is a community property state, your spouse might be responsible for paying the debts after you die, even if they were solely your debts. If there was a joint account holder or a cosigner on the account, that individual will be responsible for paying the debt if you pass away.
Unless one of those conditions is present, your loved ones won’t have to pay the debt after you die. There’s a chance that unscrupulous debt collectors will try to collect from them. If they’re contacted by a debt collector and aren’t responsible for the debt, they should not give any personal or financial information to the debt collector. Instead, they should point the debt collector toward the estate administrator.
Every aspect of estate planning, from naming your estate administrator to outlining the inheritance distribution, is important. Working with someone who’s familiar with your circumstances and understands estate planning laws is beneficial in these cases.