Death in Family

It is painful enough losing someone dear, but do you have to inherit his or her debt, too?  Not necessarily.  If the deceased has a will, the will controls the financial affairs.  A will distributes assets, not debts.  However, before any money can be distributed to the surviving heirs, all debts must be paid.  Assets are sold to pay for any debts.  Once the debts have been paid, the remaining assets can be distributed to the beneficiaries of the will.

 

The key point to remember is that you are only responsible for debts that you contractually created.  For example, if you co-sign a loan for someone and that person dies, you would be responsible for the debt.  The same is true with a joint credit card.  A joint account permits anyone named on the account to use it.  It also means that everyone listed on the account is responsible for the debt created.

 

If the debt in question belongs solely to the deceased, and there are not enough assets to cover the outstanding debt, then the creditors will end up “eating” the debt.  If a creditor is hassling the survivors, send a copy of the death certificate, along with a letter, to the credit card company (certified mail) to show the account holder has died and explain you will not be paying the outstanding debt due to lack of assets.   If harassment persists, file a complaint against the creditor with the state Attorney General’s office.

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