Are Relatives Responsible for the Debts of a Deceased Loved One?
Settling the estate of a loved one that has passed away isn’t easy. The members of the family are often left to make a variety of important decisions, including financial decisions, on behalf of their loved one. Sometimes these decisions include deciding whether to pay any debts that the debtor still owed after their death, such as student loan debt, credit card debt, mortgage loans, and other obligations. Relatives, however, aren’t responsible in most situations for paying the debts of their deceased loved one.
Are You Responsible for Your Deceased Loved One’s Debt?
Creditors will likely try to convince you that you must pay the debt left behind by your loved one. However, you are not obligated to do so on debts that aren’t owned jointly by you at the time of your loved one’s death. Debts are typically paid through the deceased person’s estate, regardless of whether there is a will or not.
When a person dies, that person’s debts often die with them. The only time you may be responsible for the debt of a loved one is if you owned any part of that debt, or possibly if you have received benefits from the debts such as a loan that was used to pay some of your living expenses.
Credit Card Debt and Death
Credit card debt will belong to the person who held the account and their relatives likely won’t have to pay the debt unless it was a joint account, or they co-signed on the loan. However, if you live in a community property state, and if the property and assets were acquired during marriage from the credit card, you may be held liable for the debt. It is important to contact an attorney in that community property state to determine your liability. Community property laws are complex and differ even between community property states.
Mortgage Loans After Death
Mortgage loans are similar to credit card debt after death. If the spouse of the deceased person is listed as a joint owner on the loan, that spouse would be liable for the debt after their spouse is deceased. The spouse also would have the option to continue making payments on the loan and stay in the home or sell the home and pay off the existing mortgage loan.
Life Insurance Policies
Life insurance policies are not considered part of the estate and the proceeds from a life insurance policy goes directly to the beneficiaries of the policy, assuming proper beneficiary designations. Beneficiaries are not obligated to use the proceeds from the insurance policy to pay for any debts the debtor had after their death.
Contact an Attorney Today
Because relatives are typically not required to pay the debts left behind by their loved ones, creditors are usually out of luck when it comes to settling the debt. However, this doesn’t mean that they won’t try to collect the debts from the loved ones that are left behind. If you feel like you are being unfairly treated or harassed by debt collectors, it is wise to speak to an attorney to ensure that your rights are protected.
Tampa attorney David Toback has decades of experience helping his clients plan their own estates and settle the estates of their deceased loved ones and he can help you too. Contact his office today to schedule a consultation and ensure that you are being treated fairly.