Is Your Family Responsible for Your Debts After You Die?
On personal finance podcasts and advice columns, you often hear from people, middle aged and older, who decide to ask for advice when they realize that their debt is more than they can reasonably expect to pay off in a lifetime. Some of these consumers took out student loans in their 50s, either to fund their own second career education or to help their children pay for college tuition. Others refinanced a home mortgage after divorce and are struggling to maintain a household on a single income. They often think that they will die with outstanding debts, and in some cases they are right, even if they spend the rest of their lives on debt repayment and do not suffer any additional financial setbacks. These people would not be asking for advice if they took the attitude of, “Who cares? I’ll be dead.” Instead, they are worried about their debts causing financial hardship for their surviving family members. If you have missed the boat on living debt free and want to ensure that your debts do not become a burden to your spouse and children, contact a Miami bankruptcy and retirement lawyer.
Plans Count More Than Money in Protecting Your Surviving Family Members From Your Outstanding Debts
Estate planning lawyers talk about probate like it is the bogeyman, but if you and everyone you know is on track to live paycheck to paycheck until they are no longer healthy enough to work and then live on Social Security until they enter a nursing home as a Medicaid beneficiary, then probate is a buffer that protects your family from your debts. Probate is when creditors get their last chance to collect debts from the decedent’s estate. The worst thing that can happen is that, when the estate settles, there is nothing left for the heirs to inherit. Trust fund babies throw a hissy fit at this prospect, and estate planning lawyers gleefully capitalize on this hissy fit, but you have long since missed the boat on generational wealth.
If it is a choice between your heirs inheriting nothing and inheriting a little bit, buy a life insurance policy. This way, the creditors can take the insurance money and, if you own your house, the probate court will not have to sell it. Another option is to declare bankruptcy and discharge any eligible debts; it doesn’t work for most student loans, but it does for credit cards, personal loans, and medical bills. The sooner you do either of these things, the better, because life insurance is less expensive the younger you are, and chapter 7 bankruptcy brings almost immediate debt relief, leaving you with less stress in your golden years. If you are jointly responsible for a debt with your spouse, the debt becomes the surviving spouse’s responsibility after the first spouse dies.
Work With a Debt Lawyer About the Next Best Thing to Debt Freedom
A South Florida debt lawyer can help you think realistically about your debts if you are approaching retirement age. Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.
Source:
msn.com/en-us/money/personalfinance/do-i-have-to-pay-off-my-spouse-s-debts-when-they-die-here-s-what-you-re-responsible-for-after-a-loved-one-s-death-plus-ways-to-protect-your-family-s-finances/ar-AA1oaEif?ocid=msedgntp&pc=ACTS&cvid=eb28db8992f640fd9b083db6037e6dc3&ei=29
