One of the most frequent questions that we get asked at our office is whether or not a surviving spouse or beneficiaries are personally responsible for paying the outstanding debts of a decedent after his or her death. A typical question is, "What if my wife had a shopping problem and max'd out all of her credit cards before her death; does that mean that I am no longer going to get her life insurance money because all of the proceeds are going to be used to pay off the credit cards?" Unfortunately, this is a tricky question because the answer depends on some essential key factors that must be considered before the Executor knows from whose funds the decedent's debts are to be paid.
Trisha Sherven wrote an excellent article for Money Talk News about paying debts after death, outlining all of the steps that one should take to determine how to handle the debts of a loved one after death. Although we still encourage our clients to contact us as soon as their loved ones die, so that we can provide guidance on the next steps to take, we feel that this article provides a good basis for where to begin.
Read the full article here.