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Who pays your unpaid bills after you die?

On Behalf of | Jul 21, 2023 | Estate Planning

When you’re getting older, it’s only natural to let your thoughts wander to what will happen to your family after you die – and a lot of older people worry about what effect their leftover debts will have on their adult children. They don’t want their liabilities to become an unexpected burden on their heirs.

From unpaid property taxes and outstanding credit card bills to your final medical expenses, who gets the bill when you die?

Your estate, not your heirs, will foot the bills

It may ease your mind to know that your bills are largely still your bills – even when you die. Unless one of your children co-signed a loan for you or shares a credit card account with you, your debts do not transfer to anybody. When you pass away, your estate administrator (or “executor”) will be in charge of cataloging your assets and debts. They will also have the authority to use the money in your estate to pay your final bills, including your taxes.

If your estate has enough money or assets in it to cover your debts, those will be paid first. Once that’s done your remaining assets will be distributed to your heirs either according to your will or the intestate laws of succession. If your estate cannot cover your debts, then you’re said to die “insolvent,” which means there is nothing left for your creditors to take. In no way does that give your creditors the right to hound your heirs for payment.

There are many estate planning strategies that involve asset protection. If you’re worried about leaving something beneficial behind for your heirs, it could be time to explore your options by seeking informed legal guidance personalized for your needs.