Four Debts After Death – What Every Family Member Should Know


by Dan A. Baron, Baron Law LLC

One day you come home to find a letter from a credit card company. It demands a debt of $ 80,000 incurred by your late husband. The credit card company demands payment and threatens to take legal action against you if you don’t pay. Don’t be afraid of these bullies. Here’s what you need to know.

First, the credit card company is correct in its efforts to collect debt from the estate. Debts do not die with the deceased, but are rather administered through the probate estate. However, creditors cannot hold family members personally responsible for these debts. Instead, in most cases, creditors cannot assert claims against the estate. If the debts exceed the value of the estate, creditors cannot sue family members.

Of course, there are exceptions. When it comes to the debt of a deceased person, it is important to determine if you are a co-signer of a note. Each account holder can be held legally responsible for an unpaid balance. So, if you co-signed for a mortgage or car loan, you remain personally responsible for the debt. Using the example above, let’s say you never used the credit card and all of the purchases were your late husband’s. Unfortunately, if you co-signed the credit card application, you are still responsible for the debts. This rule only applies to co-signers, not authorized users.

Know your rights

It is the role of the executor to pay the deceased’s unpaid bills. It is recommended that executors contact a qualified probate lawyer to understand probate laws and processes. If you are not the executor of the estate but receive phone calls and / or letters asking you to pay, you should refer the creditor to the executor. If they persist, send a certified letter stating that the person is deceased and that you are not responsible for paying the debt. Don’t be intimidated by paying off debt for which you are not responsible. If the collector makes claims you don’t believe

true, for example saying that you are a cosigner of the account, ask for proof. Let them know you are aware of your rights and will report them if they keep calling you. Harassment of bill collectors can be reported to the Federal Trade Commission (877-382-4357) and the state attorney general’s office (216-787-3030).

Avoid scams

If you are an executor of a family member, it means that the will will go to probate court. Having a will does not prevent probate. In fact, as I always like to say, having a will is “your ticket to the estate court”. Thus, since the will is transmitted to a public court system, all of the estate information is visible at the click of a button on your computer. The name, address, telephone number and estate value of the executor and the deceased through a detailed inventory of assets will be available to every person in the world. This can obviously lead to scams.

Avoid these scams by knowing your rights as an executor. If the creditor has not formally filed a case with the probate court, these debts can likely remain unpaid. There is a formal process that creditors must follow, if it is legitimate, and if the formalities are not met, creditors must not be paid. In our office, too often we see families losing hundreds of thousands of dollars by making payments to creditors who did not make a proper claim or who were a scam. We strongly recommend that executors speak to an estate attorney who has seen the scammers’ tactics. Our firm has lawyers specializing in this field.

How to avoid debt after death

As pointed out above, the debt is only paid through a judicial probate process. Therefore, unless you are a co-signer on a loan, if you avoid probate altogether, the debt dies with the deceased. It is possible to transfer your assets entirely out of probate. For example, let’s say your father dies and has a $ 70,000 credit card bill and a $ 55,000 medical bill. These debts are called “unsecured debts”. The only way these assets would be paid for would be through the executor of an estate who would foot the bill through probate. By transferring assets to loved ones entirely outside of probate, those debts die with the deceased. The question then becomes: how to avoid homologation?

Family trust

The best way to avoid probate is to create a trust. Trusts are private, can offer creditor protection, asset protection, and can provide certain tax benefits. Trusts can be funded while the estate planner is alive or after death. Trusts provide confidentiality and control of assets even after your visit. There are many trust strategies for estates of all sizes.

Common possession

Property belonging to more than one person results in possession by the survivor. Examples could include a joint bank account, jointly titled real estate and / or vehicles. Condominium accounts effectively avoid probate when the forms are completed correctly. Most banks require a simple death certificate and ID. Co-ownership is an effective way to avoid probate and quickly transfer your assets.

Beneficiary designations

If you receive life insurance or if you engage with a financial planner, you have likely completed a beneficiary designation. These are very common with retirement accounts (401 (k), 403 (b), etc.), life insurance, annuities, IRAs, Roth IRAs, and other assets. Here you simply write the names of those whose property you wish to receive after your death. However, I caution you to never rely on beneficiary designations without considering the asset protection and tax considerations of a trust.

Transfer Security on Death Registration Act

A transfer on death affidavit allows you to designate the person or entity who will receive your property upon your death. Here there may also be some protection against creditors. This is another great method to avoid probate.

For more information on probate and estate planning, contact Dan Baron, Esq. or a member of our office. Call today for a free consultation at 216-573-3723. Baron Law LLC is your Cleveland area estate planning and probate law firm.

Dan A. Baron, Baron Law LLC

Sponsored by:

Baron Law LLC

Crowne Center, office # 600

5005 Rockside Road

Independence, Ohio 44131


The opinions and claims expressed above are those of the author and do not necessarily reflect those of ScripType Publishing.


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