How much debt have you accumulated throughout the years? Your mortgage, your student loans, and medical bills can add up to an astronomical amount.
If you add up all the money that you own, you may be relieved to know that after you die, you won’t be responsible to pay it anymore. But who will? What exactly happens to your debt after you die?
Does it go away? No, it does not!
Who Becomes Responsible For Your Debts?
Everything that you own at the time of your death – your house, car, cash, etc. – is called your estate.
After you die, a court proceeding called probate will be held to determine the value of your estate.
If you think that you’re leaving your house, or other valuables to be inherited by your family members, you may be wrong.
First, a person known as the executor will use your estate to pay off your debts. This could possibly entail having to sell your property or possessions to come up with the money.
If what you owe exceeds the value of your estate, then the debt balance could be passed along to your nearest family member and become their responsibility to pay.
Knowing this should make you think twice about buying that second home, or sports car. Instead of accruing more debt you may – for the sake of your loved ones – want to start writing a check to pay off your current bills.
How To Avoid Problems With Your Estate and Debt
When you plan ahead and handle your affairs properly, your family won’t be inconvenienced by having to deal with your debt. Fred M. Kennedy, our Richmond County estate administration attorney, can help you get your affairs in order. Call us today.
Posted on behalf of Fred M. Kennedy, P.C.