It is a guarantee that you are going to die and it is likely that you are going to die with debt. Approximately 73% of consumers pass away with an average of $61,554 in debt. If mortgages are not considered in this figure, the number falls to $12,875. A concern for many is what happens to their debt when they die. For the most part, the debt disappears with the decedent. But, this is not always the case. If, for example, you die while owing mortgage debt, family members still residing in the home may have to take over the mortgage payments or sell in order to satisfy creditors. Spouses and individuals sharing accounts with the deceased may also find themselves burdened with unwanted liabilities.
The best way to avoid passing debt to loved ones is, of course, to live within set and reasonable means. More realistically, meeting with an estate planner to discuss life insurance policies and possible estate plans may serve to effectively shield family from creditors.
See Christine Digangi, What Happens to Your Debt When You Die?, MarketWatch, May 20, 2017.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
