Experts: Debt can be transferred after spouse's death


It's no fun to talk about, but so vital because now more than every many people are dying with debt that loved ones could be on the hook for paying it off.

When a loved one dies, it is not always the final word on the debt they've left behind.

"Legally debt does not transfer, it is not legally your problem. But yet you do have to deal with it because if money is owed and the estate cannot cover it, there are other burdens that pass on to the family," legal analyst Rania Mankarious said.

And more people than ever may soon find themselves with the responsibility of paying the debt of an elderly loved one.

"They are falling back on credit card debt more now than before, and also they do not have the funds they used to -- savings are not there, retirement is not there, the opportunity to work is certainly not there," Mankarious said.

While a person's debt dies with them, that's not always the case when it comes to the death of a spouse.

"Texas is a community property state, so if the debt was incurred for the community estate for that husband and wife's marriage, then the surviving spouse frequently is liable for that debt," Houston CPA Jim Trippon said.

Trippon says while spouses have to pay joint credit card debt, surviving kids do not. If there is an estate left behind, Trippon says do not take any funds from it until the debts have been paid first.

"Their estates assets should be liquidated to pay their own debts. If you distribute the assets and have not paid off the debts, that creditor has a right to go after the heirs," he said.

The best advice is get your loved ones to list their assets and debts before they pass. That way, the estate can take care of what is owed.

Once the estate is out of money, the debtors can not make heirs pay the remaining bills.

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