What happens to debt after you die? Does debt die with you, or does it become the responsibility of those you leave behind? Watch this #WebinarWednesday replay with Attorney Bob Mannor to learn more.
Does debt die with you?
The short answer: well, that depends. (We know...attorneys, right?)
There are a lot of variables in place when it comes to debt and what happens after you die. Depending on these variables, those you leave behind could become responsible for your debt. We often talk about how to protect and pass along your inheritance to those you love with estate planning – but we don’t talk enough about what happens to your debt.
Important Questions To Consider
- Are you married or single?
- If you’re the child or executor – did they leave you assets?
- As executor are you personally responsible for debts?
- What is the priority of paying debts and last expenses?
Who Get’s Paid First?
Did you know there is a hierarchy of debt when you die? There are laws that determine who gets paid first after you pass away. Knowing these rules can save your estate thousands of dollars. For example, did you know funeral expenses and attorneys are paid before credit debts and loans? Did you also know that there are spousal rights and family allowance laws that could mean those debts will never need to be repaid.
Can You Protect Your Inheritance From Debt After Death?
The best way to ensure your assets and your loved ones are protected is by working with a skilled Estate Planning Attorney while you are still alive and be sure your loved ones return to that attorney for the estate administration process. Working with an attorney can seem intimidating or costly, however, they can save you much more than you would spend by knowing the laws.
If you’re a Michigan resident and would like to work with our firm, please contact us.