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How to settle the debts of a family member after their death

The death of a family member or close friend is always a difficult thing to come to terms with. The emotional aspect alone is something that many suffer with, however on top of this emotional burden is also the practical matters associated with such an event. If the deceased loved one has debts that need to be settled, you may be confused as to how you should deal with this.

This blog will provide a brief overview into how to settle the debts of a deceased family member and an introduction into the responsibilities that might lie upon you.

Are family members responsible for the debts?

Debts that exist after death are first of all repaid through the deceased person's estate, whether they have an official will or not. Relatives of the deceased person are not in any way responsible for this debt. The only exception to this is if you jointly owned any of this debt before the time of the person's death. Any debt that cannot be paid off through the estate will usually be annulled.

Credit cards and mortgages

Unless you are a spouse of the deceased person, you will not be responsible for the debts accrued from a credit card. If you are the spouse, you may be liable through community property laws.

Mortgages work in a similar way. Only a person who is also named under the mortgage will be responsible for the debt going forward.

Life Insurance

Policies of life insurance are separate to the estate, and therefore go directly to the beneficiary without being used to pay off debts.

Therefore you shouldn't worry about the process of settling an estate on behalf of a deceased loved one -- if you don't have ownership of any of the debts, it's not your responsibility. If you do have joint ownership of any debts relating to a deceased person, you should raise any concerns with a trusted legal advisor.

Source: findlaw, "Debts after death," accessed Sep. 13, 2017

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