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Debts and Deceased Relatives

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After a relative dies, the last thing a grieving family member wants is a call from a debt collector asking them to pay a loved one’s debt. Here’s what to know about the rules and your rights when a collector contacts you about a deceased relative’s debts.

Who is responsible for a deceased person’s debts?

Who pays debts out of the deceased person’s assets.

  • Who can a debt collector contact about a deceased person’s debt? 

Can a debt collector contact me to get information about a deceased person’s representatives?

  • Can I stop a debt collector from contacting me about a deceased relative’s debt?

How to report problems with a debt collector

As a rule, a person’s debts do not go away when they die. Those debts are owed by and paid from the deceased person’s estate. By law, family members usually don’t have to pay the debts of a deceased relative from their own money. If there isn’t enough money in the estate to cover the debt, it usually goes unpaid. But there are exceptions to this rule. You may be personally responsible for the debt if you

  • cosigned the obligation, like a car loan
  • are the deceased person’s spouse and live in a community property state, such as California
  • are the deceased person’s spouse and live in a state that requires you to pay certain kinds of debt, like some healthcare expenses
  • were legally responsible for resolving the estate and didn’t follow certain state probate laws

If you have questions about whether you’re legally required to pay a deceased person’s debts from your own money, talk to a lawyer . Depending on your income, you may qualify for free legal services from a legal aid organization near you .

The executor — the person named in a will to carry out what it says after the person’s death — is responsible for settling the deceased person’s debts.

If there’s no will, the court may appoint an administrator, personal representative, or universal successor and give them the power to settle the affairs of the estate. In some states, that power may be granted to someone else who was not appointed by the court. For example, state law may establish another process for someone to become the representative of the estate even if they haven’t been formally appointed by the court.

Who can a debt collector contact about a deceased person’s debt?

The law protects people — including family members — from debt collectors who use abusive, unfair, or deceptive practices to try to collect a debt.

Under the Fair Debt Collection Practices Act (FDCPA), collectors can contact and discuss outstanding debts only with the deceased person’s

  • parent(s) — if the deceased was a minor child, which is generally defined as under age 18
  • legal guardian
  • executor, administrator, or personal representative with the power to pay debts with assets from the deceased person’s estate
  • confirmed successor in interest, which is someone a mortgage servicer has confirmed as a new owner of the deceased person’s real estate

Debt collectors may not discuss the debts of a deceased person with anyone else. 

If you’re in one of the categories listed above, you have rights. For example, debt collectors

  • can’t contact you before 8 a.m. or after 9 p.m. (unless you agree to it)
  • can’t contact you at work if you tell them you’re not allowed to get calls there
  • can’t contact you by email or text message if you request them to stop

A collector also has to give you “validation information” about the debt, either during the collector’s first phone call with you or in writing within five days after first contacting you. That information must include

  • the name and mailing address of the debt collector
  • how much money you owe, written out to list interest, fees, payments, and credits
  • the name of the creditor you owe it to
  • what to do if you don’t think it’s your debt
  • your debt collection rights
  • a tear-off form that can be used to send back to the debt collector to dispute the debt or take other actions.

Collectors can contact relatives or other people connected to the deceased (who don’t have the power to pay debts from the estate) to get the contact information of the deceased person’s representatives. This contact information includes the name, address, and telephone number of the deceased person’s spouse, executor, administrator, personal representative, or other person who can act on behalf of the deceased person’s estate. Collectors can usually only contact these people one time to get this information, and they can’t discuss the details of the debt.

Collectors can reach out again to ask for updated information, or if the relative or other person gave the collector wrong or incomplete information. But collectors still can’t discuss the debt.

Can I stop a debt collector from contacting me about a deceased relative’s debt? 

If you’re responsible for paying a deceased relative’s debt, the law gives you many of the same rights as the original debtor. This includes stopping a collection company from contacting you . To do this, email or send a letter to the collector. A phone call isn’t enough. Tell the collector you don’t want them to contact you again. Keep a copy of the email or letter for your files, and if you send a letter, send it by certified mail and pay for a “return receipt” so you’re able to document when the collector got the letter.

Once the collection company gets your request, it can only contact you to

  • confirm it will stop contacting you in the future
  • say it plans to take a specific action, like filing a lawsuit

But even if you stop collectors from communicating with you, the debt doesn’t go away. The collectors may still try to collect the debt from the estate or anyone else who is responsible for paying it.

To learn more about debt collection and your rights, read Debt Collection FAQs .

Report any problems you have with a debt collector to

  • the FTC at  ReportFraud.ftc.gov
  • your state attorney general

Many states have their own debt collection laws that are different from federal law. Your state attorney general's office can help you understand your rights under your state’s law.

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Does a person's debt go away when they die?

When someone dies, their debts are generally paid out of the money or property left in the estate. If the estate can’t pay it and there’s no one who shared responsibility for the debt, it may go unpaid.

Generally, when a person dies, their money and property will go towards repaying their debt. If there’s no money in their estate, the debts will usually go unpaid.

For survivors of deceased loved ones, including spouses, you’re not responsible for their debts unless you shared legal responsibility for repaying as a co-signer, a joint account holder, or if you fall within another exception.

If you’re not responsible for a debt, debt collectors may still contact you if you’re a surviving spouse or oversee the estate, but it’s illegal for debt collectors to suggest you’re responsible for paying from your own money. It’s also always illegal for them to harass you about paying the debt.

When you may be responsible for someone else’s debt

You’re not typically responsible for repaying the debt of someone who’s died, unless:

  • You’re a co-signer on a loan with outstanding debt
  • You’re a joint account holder on a credit card. Note: this is different from an authorized user
  • You’re a surviving spouse and your state law requires spouses to pay a particular type of debt
  • You’re the executor or administrator of the deceased person’s estate and your state law requires executors or administrators to pay an outstanding bill out of property that was jointly owned by the surviving and deceased spouses
  • You’re a surviving spouse and you live in a community property state that requires surviving spouses to use jointly-held property to pay debts of a deceased spouse. These states include Alaska (if a special agreement is signed), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

If there was no co-signer, joint account holder, or other exception, only the estate of the deceased person owes the debt.

When there is no estate

If there is no money or property left in the estate, or the estate can’t pay, the debt will generally not be paid. For example, when state law requires the estate to pay survivors first, there may not be any money left over to pay debts.

How debt collectors can communicate with you about a deceased person’s debt

If you’re a surviving spouse or a personal representative , executor, or administrator of a deceased person’s estate, debt collectors can contact you to discuss debts and payments from the estate. However, it’s not legal for them to state or imply that you’re personally responsible for paying the person’s debts from your own assets, unless your situation falls into one of the specific circumstances listed above that would make you legally obligated for the debt.

Under the Fair Debt Collection Practices Act (FDCPA), debt collectors may not harass, oppress, or abuse you or any third parties they contact . Even if you’re legally responsible for a debt, you have the right to tell a debt collector to stop contacting you .

Ways to understand whether you’re responsible for the debt

Talk with a lawyer.

If you have questions about whether you’re responsible for a deceased person’s debts, you may want to talk to a lawyer. To find an attorney, you can contact a lawyer referral service in your area and ask for a lawyer with experience in consumer law , estate or probate matters, debt collection defense, or the FDCPA.

Some attorneys may offer free services or charge a reduced fee. There may also be legal aid offices or legal clinics in your area that will offer their services for free if you meet their criteria. Servicemembers should consult their local JAG office .

For older Americans and their caregivers, the Eldercare Locator also provides trustworthy local support resources, including free legal aid for eligible older adults.

Get details in writing

Debt collectors are required to provide specific information about a debt during your first communication with them or within 5 days of the first communication. This information is known as a validation notice. If the collector refuses to give you any information about the debt – even though you are a surviving spouse, parent of a deceased minor, or personal representative of the estate – it might be a scam.

If you’re having an issue with debt collection, you can submit a complaint with the CFPB .

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Can you inherit debt from your parents?

October 17, 2023 | 6 min read

When a family member passes away, inheriting debt is likely one of the last things you want to think about. But debt collectors could make this difficult situation even worse by contacting you. If you’re not sure how debt inheritance works or how to handle financial matters after a death in the family , this could add extra stress to the circumstances.

Let’s take a look at some information that can help you navigate dealing with inherited debt.

Key takeaways

  • A deceased person’s debt doesn’t die with them but often passes to their estate. 
  • Certain types of debt, such as individual credit card debt, can’t be inherited. However, shared debt will likely still need to be paid by a surviving debtholder.
  • There are laws that protect family members from aggressive debt collectors who may use questionable methods to collect debts.
  • Legal advice from a qualified professional can help determine which debts a family is responsible for.

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Do you inherit your parents’ debt?

If a parent dies, their debt doesn’t necessarily transfer to their surviving spouse or children. The person’s estate—the property they owned—is responsible for their remaining debt. Typically, a representative of the estate will use the estate’s assets to pay any outstanding debt instead of a spouse or child having to pay out of their own wallet.

If the estate doesn’t have enough money, the estate’s debts might go unpaid. Generally, family members don’t have to pay the debts of a loved one who passes away unless they’re shared debts.

Inherited debt repayment can vary by the type of debt. For example, secured debt, like a car loan , might be handled differently than unsecured debt, like a credit card.

What debts can be inherited?

There are a few types of debt that you can inherit. Here are a few situations where you might be liable for debts your family member’s estate couldn’t pay for.

Home equity loans on inherited houses

Inheriting a family member’s home after they die can result in financial liabilities. If the decedent—the person who died—had a home equity loan or mortgage, the recipient could wind up with their debt.

Co-signed and joint debt 

Those who have joint accounts—like a joint credit card —can wind up with a co-holder’s debt if that person dies. Co-signers can also be responsible for a decedent’s debt. This doesn’t apply to authorized users , though.

Community property state debt

Community property states—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin—might have different requirements for a spouse handling their deceased partner’s debts. The spouse may have to pay for some of their late spouse’s debts using community assets.

States have different definitions of community property, but in general, the term refers to property acquired by the couple during their marriage. Consider checking your state’s laws to understand the terms.

What assets can you protect from creditors?

Creditors may not be able to claim certain types of assets if a family member dies. These assets typically have a designated beneficiary—a person or entity the asset owner has chosen to receive that asset upon certain conditions, including death. Below are a few examples of protected assets.

Living trust

A trust is an arrangement regulated by state law in which one party holds property for a future beneficiary. Setting up a living trust can allow an estate to bypass the complicated probate process—which determines if there’s a valid will, who the beneficiaries are, the value of the estate and how to transfer the assets to the beneficiaries. A living trust can protect assets from creditors and reduce tax burdens.

Retirement accounts

A retirement account, such as a 401(k) , Roth IRA or other type of retirement investment , might be protected. These often go directly from the late account holder to the beneficiary.

Life insurance

Those who are designated beneficiaries of a life insurance policy will likely receive the decedent’s assets directly. Creditors are unlikely to be able to seize these assets.

Do adult children inherit a parent’s medical debt?

Medical debt will likely be paid for by the decedent’s estate. If their estate doesn’t have enough assets to cover the medical bills, the creditors might write the debt off. Adult children or surviving spouses who were co-signers for their treatment or live in a community property state, though, could be responsible for settling the health care debt .

Can you inherit student loan debts?

If someone passes away, any remaining federal student loan debts are discharged if a surviving family member or representative submits proof of death. This can include a death certificate—either the original or a certified copy.

Generally, private student loans are also discharged upon death. But there are some lenders that will hold a co-signer responsible for student loan payments even after the borrower’s death.

Tips for managing inherited debt

When you wind up with inherited debt, there are a few actions you can take to better understand your rights and obligations. Let’s explore a few possibilities.

Consider getting legal help

When someone in your family dies, it’s possible that debt collectors will contact you to pay debts. It’s also possible that they’ll be aggressive and may take advantage of you if you’re not familiar with the rules that govern them.

A lawyer can help you determine which of the decedent’s debts are your responsibility. It’s also worth understanding the Fair Debt Collection Practices Act , which regulates debt collectors. The act protects beneficiaries from threats and harassment. And consumers can submit complaints to the Consumer Financial Protection Bureau.

There are also legal aid offices and clinics that can help those who can’t afford an attorney.

Take steps to prevent credit report issues

A person’s credit reports  aren’t automatically closed after they pass away. It can be wise for family members to inform credit bureaus of their loved one’s death.

Informing one of the three major credit bureaus —Equifax®, Experian® and TransUnion®—is often a good preventive step. You might need to mail in your late family member’s death certificate along with their legal name, Social Security number, date of birth, date of death and other information the bureau requires. That credit bureau will typically notify the other two credit bureaus.

This will seal the deceased’s credit reports to avoid potential identity theft .

Debt inheritance in a nutshell

It’s possible for parents to die and leave surviving family members with debt. But there are ways to protect assets from debt collectors so that the assets can go to family members. Legal professionals can provide specifics about your local laws and any exceptions.

Planning for your future? Learn more about preparations that can help your family in the event of your death.

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Can You Inherit Debt?

Lean which types of debt can become your responsibility

debt transfer to next of kin

Debts That Can Be Inherited

Debts that can’t be inherited, how debt is handled after death, what if debts can’t be paid, frequently asked questions (faqs).

Image Source / Getty Images

Losing a loved one is never easy. There's much for the surviving spouse, partner, and other relatives to sort through, including any unpaid debts. Debts don't go away when a person dies, but that doesn't mean the family is responsible for the outstanding balance.

Debts technically can't be inherited, but some can be passed on depending on the type of debt and how it's owned. The estate—the assets left behind when a person dies—is generally responsible for paying any outstanding debts. Understanding what happens to debts can help you figure out how to handle debts left behind or help with estate planning.

Key Takeaways

  • Certain types of debts can be passed down based on how the debt is owned.
  • During the probate process, the executor of the estate sorts out assets and expenses.
  • Assets that go through probate may be used to take care of outstanding debts.
  • Collection agencies aren't allowed to pursue relatives for the deceased person's debts.

Several kinds of debts of a deceased person may become your responsibility, depending on the type of debt and your relationship to them. For example, some states require the surviving spouse to pay certain debts like healthcare expenses.

Here are other types of debts you could be responsible for:

Joint Debts

You'll be responsible for debts you hold jointly if the other party dies. For example, if you hold a joint credit card with your spouse and are equally responsible for regular monthly payments, you will still be responsible for payments if they pass away.

Authorized users aren't responsible for a credit card balance after the death of the primary cardholder.

Cosigned Debts

If you’ve cosigned a loan, you've already agreed to be responsible for the debt if the primary borrower isn't able to pay. Your agreement still stands even after the primary borrower's death, so you will be required to make the payments if the loan isn’t paid off by their estate.

Mortgage or Home Equity Loan

Inheriting a house with an outstanding mortgage or home equity loan means you'll have to make a decision about what to do with the real estate and how to handle the debt.

"If you inherit an asset that has debt attached to it, you will be responsible for making payments on that debt if you want to keep the asset," advises Diedre Braverman, an estate planning attorney with Braverman Law Group located in Boulder, Colo.

Even if you're considering selling the property, you must stay current on payments until the sale is final to avoid foreclosure. 

Mortgage payments won't go on your personal credit report, Braverman said. 

Debt in Community Property States

In certain states, two spouses equally own any money earned, property acquired, and debts accrued during the marriage. In these community property states, laws, a surviving spouse is responsible for repaying debts acquired during the marriage. 

Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

In three states—Alaska, South Dakota, and Tennessee—spouses can opt into the community property system or designate specific assets or debt as community property.

With a deeded timeshare, heirs may inherit benefits of the timeshare and the payments that come along with it. Depending on the timeshare company’s policy, an heir may have the option to decline the timeshare, and it will be offered to the next-of-kin. If both the heir and next-of-kin decline the timeshare, it may be foreclosed and the resulting debt will be taken from the estate.

Several types of debts generally won't be passed on to a spouse or relative, including individually-held credit card debt, federal student loans, unsecured loans, and collections. (A surviving spouse may be responsible for paying these debts in a community property state.)

While those types of debts can't be inherited, they aren't automatically canceled. Instead, assets in the estate will first be used to pay off creditors who submit a claim. If the amount of the debt exceeds the estate assets, creditors may write off the debt and will not hold someone else responsible for paying it.

Probate is the process where the court determines whether a will is valid.

"[It's] essentially the retitling process of all the decedent's assets," Braverman said. "In the process of retitling assets, any debts have to be paid before probate assets are distributed to the beneficiary."

Each state and municipality has its own rules for the length of time creditors can make a claim and how debts are prioritized. The executor of the estate gathers the assets, pays bills and taxes (including debts), then distributes any remaining assets according to the will or by state law if there is no will.

The executor of the estate could be responsible for debts if they didn't follow certain state probate laws.

Probate and Non-Probate Assets

Not all assets pass through probate and, if they don’t, they can't be used to pay the estate's debt. For example, the person who died may have transferred a title to someone else before their death, or had a mechanism in place to transfer ownership. These non-probate assets should have a joint owner, trust owner, or named beneficiary (including a trust).

On the other hand, probate assets must pass through probate and are divided to heirs based on the decedent's will. These are typically assets you individually own that do not have a named beneficiary.

Probate and non-probate assets vary by state so make sure you check with your state laws for the rules that apply to you.

Some creditors cancel debt that can't be paid out of the estate such as when there aren't enough assets.

If the deceased person has collection accounts that come up after probate, family members aren't responsible for paying those, unless they were jointly owned. In addition, under the debt collection law , collectors can only discuss collection accounts with the deceased person’s spouse, parent (if the deceased was a minor), guardian, executive, or administrator.

Collectors can contact other relatives, generally only once, to get contact information for the person responsible for paying the deceased person's debts.

Contact an attorney if a debt collector contacts you about paying a deceased person's debt.

Can your parents inherit your debt when you die?

Parents won't be responsible for debt of a decedent child unless they are cosigners, joint account holders, or the primary cardholder on a card where the child was an authorized user. Parents may be subject to pay debts on any inheritance received from the child.

How long does probate take?

The timing of probate varies by state, the complexity of the estate, and whether the will is contested, if a will exists. Probate can take longer if there are complex assets, multiple beneficiaries who live in different places, or a large window for creditor claims.

When is probate not necessary?

Probate isn't necessary if there are no assets or if the assets will pass to heirs without a probate. For example, probate can be avoided if property is held by a revocable living trust , if all the estate's assets are jointly owned, or if the assets have a designated beneficiary.

Consumer Financial Protection Bureau. " If Someone Dies Owing a Debt, Does the Debt Go Away When They Die? "

IRS. " Community Property ."

Minnesota Department of Human Services. " Recovering MA Funds in Probate ."

Federal Trade Commission. " Debts and Deceased Relatives ."

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What Happens to A Deceased Relative’s Debt When They Die?

Stephanie Henrick of High Swartz LLP. writes..

A common concern of clients during the initial estate planning process is what happens to debt when you die. This is a valid concern for next of kin and estate beneficiaries, and we’ll delve into it below.

Who is responsible for paying off the debts of a loved one? Can the debt of the deceased be forgiven? What happens if the deceased estate does not have enough money to pay the debts? The answers to these questions can be found in case law, the Internal Revenue Code & Regulations and Pennsylvania statutory laws. To make it easier to understand what happens to debt when you die, let’s look at a hypothetical estate.

Ester, a Pennsylvania resident, died with $50,000 in credit card debt, medical expenses from her final illness, and various utility expenses associated with her West Chester Borough home. Ester’s assets are her home, and funds of $25,000 held in her checking and savings accounts. Ester’s children are the beneficiaries of her residuary estate per her Will.

Pennsylvania law, 20 Pa.C.S.A. Section 3381 , states that Ester’s debts don’t just disappear at her death. If the debts don’t disappear, who pays? Only Ester’s Estate is responsible for payment of her debts  unless  a third-party (family member, neighbor, etc.) co-signed a loan or credit card with Ester.

For now, let’s assume no one co-signed any loans with Ester. Ester’s credit card debt, her final medical expenses and her various utility expenses will be paid by her estate from the assets that pass pursuant to the terms of her Will. These assets are Ester’s home and the $25,000 funds from her checking and savings accounts. Ester’s Executor will need to sell the home and use the proceeds from the sale to pay off the credit card debt, final medical expenses and utility bills.

It’s possible that Ester’s estate could fail to pay her credit card debts due to insolvency (inability to pay one’s debts). And it’s possible that the Executor’s attempts to have the credit card discharged fail as well.

What happens if the estate can’t pay the debts?

If you recall, Ester has used her credit cards to purchase items worth $50,000. The borrowed funds used to purchase items are not included in Ester’s gross income because at the time Ester borrowed the funds, she also created a corresponding liability to pay back the funds to the credit card companies. Ester’s overall net worth has not increased. Courts have consistently held that borrowed funds are not included in taxpayer’s income. The IRS has consistently agreed with this treatment.

Do credit card companies forgive the debt when someone dies?

It would be logical to think that if the credit card companies forgive the debt, the debt should disappear, right?  WRONG!  The general rule under the IRS Rules & Regulations states that the cancellation of a debt for less than adequate consideration causes the debtor to recognize ordinary income in the amount of debt that was forgiven.   Section 61(a)(12)  of the Internal Revenue Code states that gross income includes “[i]ncome from the discharge of indebtedness.”  No matter how you slice it or dice it… “cancellation of indebtedness”, “cancellation of debt”, “discharge of debt”, and “forgiveness of debt” converts to ordinary income!

The credit card companies report the forgiveness of deceased debt to the IRS by using a  1099-C – Cancellation of Debt  form. Even if the credit card company fails to issue a 1099-C form, the cancellation of debt income is still reportable on the estate fiduciary income tax return.

The $50,000 of credit card debt has been converted into income, which must be reported on the estate’s federal fiduciary income tax return, Form 1041 – US Income Tax Return for Estate and Trusts. Here, at the very least, Ester’s estate has $50,000 in reportable income to the IRS. If an estate has reportable income, it likely has income tax to pay unless the estate’s deductions wipe out income.

But what if Ester’s estate is insolvent (unable to pay the taxes)?  Section 108  of the IRS Code provides exceptions for which Ester’s estate may be eligible. Section 108(a)(1)(B) excludes from gross income the cancellation of indebtedness of an insolvent debtor, but only to the extent of the amount of the debtor’s insolvency immediately before the debt was forgiven. Section 108(a)(3). So if Ester’s estate is insolvent prior to the debt being forgiven, the estate may exclude the cancellation of debt using  IRS Form 982,  Reduction of Tax Attributes Due to Discharge of Indebtedness .  

It’s important to note that only assets that pass through probate are considered for determining insolvency. Recall  probate assets  are those assets that pass pursuant to the terms of a decedent’s Will. Here, probate assets would be Ester’s West Chester Borough home and the funds held in the checking and savings accounts. An estate with cancellation of debt  (COD) income and very few probate assets will be insolvent if all assets pass directly to beneficiaries through beneficiary designations (life insurance, IRAs, 401(k)). Designated beneficiaries who receive these kinds of assets are not liable for paying a decedent’s debts.

So who is responsible for paying the debt?

In the end it falls on the estate to pay the decedent’s debt. If the debt is forgiven, it becomes ordinary income reportable on the estate’s fiduciary income return regardless if a Form 1099-C was issued by the creditor.  If the estate is insolvent, it may be able to exclude the cancellation of debt under Section 108(a)(3) of the IRC.

Before undertaking an estate administration without an  estate lawyer , remember the law is complex because:

  • there are usually exceptions to the rules,
  • the law changes frequently, and
  • multiple areas of law can impact an estate, such as IRS Rules & Regulations, Pennsylvania statutory and case law.

Originally published at the JD Supra Platform

https://www.jdsupra.com/legalnews/what-happens-to-debt-when-you-die-2454802/

Debt After Death: What You Should Know

Some types of debts are forgiven when you die, and others could haunt your family until they’re paid off.

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debt transfer to next of kin

If you are concerned about incurring debt after a family member’s death or are worried how your own debt will impact your family, here are some things you should know.

First things first: At death, your assets become your estate. The process of dividing up debt after your death is called probate. The length of time creditors have to make a claim against the estate depends on where you live. It can range anywhere from three months to nine months. Therefore, you should get familiar with your state’s estate laws, so you are well aware of which rules apply to you.

Beyond those basics, here are some cases where debts are forgiven after death and others where they still must be paid, one way or another:

Checklist: Steps to Take after Your Spouse Dies

Investment advisory and financial planning services are offered through Summit Financial LLC, an SEC Registered Investment Adviser, 4 Campus Drive, Parsippany, NJ 07054. Tel. 973-285-3600 Fax. 973-285-3666. This material is for your information and guidance and is not intended as legal or tax advice. Clients should make all decisions regarding the tax and legal implications of their investments and plans after consulting with their independent tax or legal advisers. Individual investor portfolios must be constructed based on the individual’s financial resources, investment goals, risk tolerance, investment time horizon, tax situation and other relevant factors. Past performance is not a guarantee of future results. The views and opinions expressed in this article are solely those of the author and should not be attributed to Summit Financial LLC. Links to third-party websites are provided for your convenience and informational purposes only. Summit is not responsible for the information contained on third-party websites. The Summit financial planning design team admitted attorneys and/or CPAs, who act exclusively in a non-representative capacity with respect to Summit’s clients. Neither they nor Summit provide tax or legal advice to clients. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local taxes.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA .

1. Beneficiaries’ money is partially protected, IF they are properly named

If you or your loved one has completed a beneficiary form for each account — such as your life insurance policy and 401(k) — unsecured creditors typically cannot collect any money from those sources of funds. However, if beneficiaries were not determined before the death, the funds would then go to the estate, which creditors could go after.

These 2 Words Could Send Your Retirement Money to the Wrong Beneficiary

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2. when it comes to credit cards, what you signed is important.

Unfortunately, credit card debt does not just disappear when you die. Usually, the deceased’s estate pays the credit card debt from the estate’s assets. Typically, children do not inherit the credit card debt — unless they are a joint holder on the account.

Surviving spouses are responsible for their deceased spouse’s debt if he or she is a joint borrower. Note this is different from an authorized user. Additionally, if you live in a community property state, you could be responsible for the credit card debt of a deceased spouse. It’s best to check your state laws. (A good resource is the Consumer Financial Protection Bureau .)

Even if you did not contribute to a credit card balance, if you signed a joint application for the card, you are liable to repay that balance if your family member passes. Again, this is not to be confused with being an authorized user on a credit card, which has different rules. Depending on the state you live in, you may not have to pay that balance.

If the estate has no value and the owner of the credit card passes, assuming there are no joint borrowers, the credit card company loses, and they write off the debt. If you lost a loved one recently, make sure to avoid using the credit card as it could be viewed as fraud, which makes the situation even more complicated. I suggest contacting the three major credit bureaus (TransUnion, Equifax, Experian) and have them flag the account as “deceased.” This should prevent further activity on the credit card.

I also suggest getting legal help if a creditor asks you to pay off a credit card. Don’t assume you are liable just because someone says you are.

2 Credit Card Gotchas to Watch Out For

3. Federal student loans are forgiven

This forgiveness applies both to federal loans taken out by parents on behalf of their children and loans taken out by the students themselves. If the borrower dies, then the federal student loans are forgiven. The same if the student passes, the loan is discharged. Proof of death is required, which may be an original or a certified copy of the death certificate.

For private student loans, on the other hand, there is no law requiring lenders to cancel a loan. Some loan programs offer loan forgiveness at death while others will charge the debt to the estate of deceased. It is best to check with the loan servicer.

FAQs on CARES Act Relief for Student Loan Borrowers

4. Passing the mortgage on to your heirs

The word mortgage comes from the French mort for “death” and +gage “pledge,” as in payable to death. But it really should mean payable after death as well. If you leave a mortgage behind for your kids, under federal law, lenders must allow family members to take over a mortgage when they inherit residential property. This law prevents heirs from having to qualify for the mortgage. Heirs are not required to keep the mortgage, meaning they can refinance or pay off the debt entirely. For married couples who are joint borrowers on a mortgage, the surviving spouse can take over the loan, refinance, or pay it off.

If you inherit a property with a mortgage and can’t afford the payments, there are options, but theyl depend on the situation. For instance, was there a reverse mortgage? That may need to be paid off as well. Is the property underwater? If the mortgage owed is greater than the property value, that may pose problems. Did you inherit the property and mortgage with siblings? The house may be more valuable to one sibling than another. If that’s the case, then you may want to discuss equalizing the estate — one sibling inherits the house while the other keeps some other asset like the life insurance proceeds. It’s best to consult with the mortgage company, estate lawyer and other family members about possible workarounds. Mortgage payments will need to be paid, so it’s best not to procrastinate.

How to Play Defense on Your Debt – Even in an Economic Downturn

4. Marriage matters

If your spouse passes, you are legally required to pay any joint tax owed to the state and federal government. In community property states, you must abide by laws that make you — the surviving spouse — in charge of paying off any debt your partner acquired while you were married. That includes credit card debt, even on cards you might not have known your spouse had opened. There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. However, in other states, you may only be responsible for a select amount of debt, such as medical bills.

In an ideal world none of us would like to pass our debts onto the surviving spouse or children. But the reality is Americans use debt in a variety of ways, including student loans, credit cards and mortgages. If you can, use this time now to get your debts organized and evaluate how your survivors might be impacted if you pass.

This exercise may prompt you to buy more life insurance to pay for your debts at death. Or consider paying down the debts now while you are alive. Either path you choose, your next of kin, spouse, children and family members would greatly appreciate it. You might even say they would be in debt to you.

For more financial planning insights for Widows and Widowers, please visit my website at www.survivorplanning.com .

When You Lose a Loved One Who Handles All the Money

Michael Aloi is a CERTIFIED FINANCIAL PLANNER™ Practitioner and Accredited Wealth Management Advisor℠ with Summit Financial, LLC.  With 21 years of experience, Michael specializes in working with executives, professionals and retirees. Since he joined Summit Financial, LLC, Michael has built a process that emphasizes the integration of various facets of financial planning. Supported by a team of in-house estate and income tax specialists, Michael offers his clients coordinated solutions to scattered problems.

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debt transfer to next of kin

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Does next of kin have to pay debt?

As a rule, a person's debts do not go away when they die. Those debts are owed by and paid from the deceased person's estate. By law, family members do not usually have to pay the debts of a deceased relative from their own money. If there isn't enough money in the estate to cover the debt, it usually goes unpaid.

Do debts pass on to next of kin?

What debts are forgiven at death.

  • Secured Debt. If the deceased died with a mortgage on her home, whoever winds up with the house is responsible for the debt. ...
  • Unsecured Debt. Any unsecured debt, such as a credit card, has to be paid only if there are enough assets in the estate. ...
  • Student Loans. ...

Does your family inherit your debt?

In most cases, an individual's debt isn't inherited by their spouse or family members . Instead, the deceased person's estate will typically settle their outstanding debts. In other words, the assets they held at the time of their death will go toward paying off what they owed when they passed.

Who is responsible for credit card debt after death?

Who Is Responsible for Credit Card Debt When You Die? When you die, any debt you leave behind must be paid before any assets are distributed to your heirs or surviving spouse . Debt is paid from your estate, which simply means the sum of all the assets you had at the time of your death.

THE TRUTH ABOUT A NEXT OF KIN! (Who really will get all the MONEY of a LATE person?)..must watch

What happens to debt when someone dies?

What happens to debts when someone dies? When someone dies, their debts become a liability on their estate . The executor of the estate, or the administrator if no will has been left, is responsible for paying any outstanding debts from the estate.

How do I get a $255 death benefit?

You can apply for benefits by calling our national toll-free service at 1-800-772-1213 (TTY 1-800-325-0778) or by visiting your local Social Security office. An appointment is not required, but if you call ahead and schedule one, it may reduce the time you spend waiting to apply.

Are medical bills forgiven after death?

Medical debt doesn't disappear when someone passes away . In most cases, the deceased person's estate is responsible for paying any debt left behind, including medical bills.

Can debt collectors go after family?

Debt collectors aren't allowed to harass you or your family members about outstanding debts . ... And under the Fair Debt Collection Practices Act (FDCPA), creditors aren't even supposed to talk to your relatives, friends or neighbors about your debts.

What if there is no money in the estate to pay debts?

If the estate does not have enough money to pay back all the debt, creditors are out of luck . ... If an executor pays out beneficiaries from an estate before all the debts are settled, creditors could make a claim against that person personally.

Does my husband's debt become mine?

Do You Inherit Debt When You Get Married? No. Even in community property states, debts incurred before the marriage remain the sole responsibility of the individual. ... If you signed up for a joint credit card before getting married, then both spouses would be responsible for that debt .

How do you collect a debt from a deceased person?

Send a claim to the executor of the estate for the debt owed . Include copies of any proof you have of the debt. Be prepared to defend your claim if the executor requests more information. Wait for the estate to be settled.

Who is responsible to pay back all debts?

Summary—Debts of Congress The United States takes full financial responsibility for all the debts accrued and money borrowed under the authority of the Second Continental Congress during the American Revolution. The United States solemnly pledges to repay all these debts.

Are you responsible for parent's debt?

A: In most cases, children are not responsible for their parents' debts after they pass away . However, if you are a joint account holder on any credit cards or loans, you would be liable for paying off the amounts due.

Is a wife responsible for deceased husband's debts?

Family members, including spouses, are generally not responsible for paying off the debts of their deceased relatives. That includes credit card debts, student loans, car loans, mortgages and business loans. Instead, any outstanding debts would be paid out from the deceased person's estate.

How long do creditors have to collect after death?

Creditors have one year after death to collect on debts owed by the decedent. For example, if the decedent owed $10,000.00 on a credit card, the card-holder must file a claim within a year of death, or the debt will become uncollectable.

What is a deceased person's estate?

The property that a person leaves behind when they die is called the “decedent's estate.” The “decedent” is the person who died. Their “estate” is the property they owned when they died . To transfer or inherit property after someone dies, you must usually go to court.

Do I have to pay my husbands credit card debt when he dies?

The good news is that in most cases, you are not personally liable for your deceased spouse's debts . Both the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) confirm that family members usually do not have to pay the debt of deceased relatives using their personal assets.

How much does Social Security pay for a funeral?

The Social Security Administration (SSA) pays a small grant to eligible survivors of some beneficiaries to help with the cost of a funeral. In 2020, this amount was set by law at $255 for SSI recipients .

Why is the death benefit only $255?

Thus 3 X the PIA for these maximum cases would yield a LSDB of $255. In 1954, Congress decided that this was an appropriate level for the maximum LSDB benefit, and so the cap of $255 was imposed at that time.

Who qualifies for a bereavement payment?

Members of a couple To be eligible, you both needed to be getting a pension or income support payment for 12 months or more. A bereavement payment is usually equal to the total you and your partner would've got as a couple, minus your new single rate. You can get it for up to 14 weeks after your partner's death.

What debts are paid first after death?

Typically, fees — such as fiduciary, attorney, executor and estate taxes — are paid first, followed by burial and funeral costs. If the deceased member's family was dependent on him or her for living expenses, they will receive a “family allowance” to cover expenses. The next priority is federal taxes.

Can you use a deceased person's bank account to pay for their funeral?

Paying with the bank account of the person who died It is sometimes possible to access the money in their account without their help. As a minimum, you'll need a copy of the death certificate , and an invoice for the funeral costs with your name on it.

What happens to a debt after 6 years?

Are debts really written off after six years? After six years have passed, your debt may be declared statute barred - this means that the debt still very much exists but a CCJ cannot be issued to retrieve the amount owed and the lender cannot go through the courts to chase you for the debt.

Does power of attorney mean you are responsible for debts?

When it comes to debt, an agent acting under power of attorney is not liable for any debts the principal accrued before being given authority or/and any obligations outside their scope of authority.

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How Property is Transferred After Death Without a Will

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Table of Contents

How property transfer in probate works

How to avoid property transfer in probate.

If you die without a will, called dying intestate , your state's probate court decides where your property goes. Intestate succession laws vary by state, but your property will generally pass to your next of kin or the state if no relatives can be found.

Without a will, probate — the process of distributing your assets after your die — can be a longer, more complex process for your loved ones. Estate planning tools such as wills, trusts, transfer-on-death deeds and payable-on-death designations can simplify the process.

» Estate planning? Here's a 7-step checklist to get started

Most estates must go through probate, but the process can look different depending on whether you have a will.

With a will

Probate begins when the last will and testament and a certified copy of the death certificate are submitted to the county court of the deceased. 

The executor named in the will handles the estate administration. This includes distributing property and accounts to beneficiaries and ensuring that outstanding debts, taxes, and funeral expenses are paid.

If you have beneficiary-designated accounts such as life insurance and retirement accounts, those assets will pass directly to the beneficiaries named without passing through probate.

» MORE: The pros and cons of handwriting a will

Without a will

Your local probate court follows your state's intestate laws, typically using the next-of-kin designation to determine beneficiaries and distribute the assets accordingly. 

The state can take possession of the property in a process called escheat if the probate court is unable to contact any next-of-kin to name heirs . 

If the property is solely owned, heirs designated by the court must sign, notarize, and submit an affidavit of heirship to the court before the transfer of the property deed can occur. 

If the property is jointly owned, the surviving owner is generally considered the heir. The surviving owner must submit a certified copy of the deceased owner's death certificate and an affidavit of survivorship to the probate court to transfer sole ownership. 

» Learn more: How joint tenancy with rights of survivorship works

Transfer on death deed

Property held in a transfer on death (TOD) deed automatically transfers to a beneficiary when the owner dies. This estate planning tool keeps the property from going through probate.

A TOD deed is relatively simple to create, but it's only available in about half of U.S. states.

Payable on death bank account

A payable on death (POD) account works similarly to a TOD deed by transferring a bank account directly to a beneficiary upon the owner's death.

To claim the account, the beneficiary will need to provide the bank with their identification and a certified copy of the account owner's death certificate .

Property held in a trust — a legal arrangement that authorizes someone else to handle your assets — also bypasses probate. Many types of trusts exist for different purposes, and some trusts can reduce estate taxes.

Trusts can give you greater control over your assets, but they can be more expensive and time-consuming to set up than other estate planning tools.

» Learn more: The difference between a living trust and a will

Wills aren't required, but they can significantly reduce complications in the probate process and ensure that your wishes are honored in the event of death. You can write a will with an estate planning attorney or through online will-writing software.

» Need some help? Check out our roundup of the best online will makers

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debt transfer to next of kin

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What (and Who) Is Next of Kin?

Understanding next of kin, jurisdiction over next of kin, insurance and retirement plans, responsibilities of next of kin, next of kin vs. power of attorney, the bottom line.

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What (and Who) Is Next of Kin, and Why Does It Matter?

debt transfer to next of kin

Skylar Clarine is a fact-checker and expert in personal finance with a range of experience including veterinary technology and film studies.

debt transfer to next of kin

Next of kin refers to a person's closest living relative(s). Individuals who count as next of kin include those with a blood relation, such as children, or those with a legal standing, such as spouses or adopted children. A person's next of kin often takes precedence over others in inheritance cases, especially when a will isn't established.

Key Takeaways

  • Next of kin is defined as a person's closest living relatives through blood or legal relationships.
  • The specifics of determining next of kin, and inheritance, vary by jurisdiction.
  • A legal will covering inheritable property usually takes precedence over the inheritance rights of someone's next of kin.
  • In some cases, the next of kin may be able to inherit someone's digital assets and obligations.
  • Funds from insurance policies and retirement accounts go to beneficiaries designated by these documents, regardless of relationships or will bequests .

What is the Meaning of Next of Kin?

Next of kin refers to individuals who share a relationship through blood, marriage, or another legal bond, such as adoption. This relationship helps establish who would receive a portion of a person's estate by the laws of descent and distribution if there is no will . In this context, the next of kin is the spouse.

Inheritance rights use the next of kin relationship for anyone who dies without a will and no spouse or children. Surviving individuals may also have responsibilities during and after their relative's life. For example, the next of kin may need to make medical decisions if the person becomes incapacitated, or take responsibility for their funeral arrangements and financial affairs after their relative dies.

A legally and properly executed will that covers inheritable property usually takes precedence over next-of-kin inheritance rights. If the deceased person left no will, their estate passes to a surviving spouse in nearly all states. If the couple is divorced, postnuptial agreements may terminate or alter these rights. If a surviving spouse remarries, it generally does not affect their inheritance rights.

In the absence of a surviving spouse, the person who is next of kin inherits the estate. The line of inheritance begins with direct offspring, starting with their children, then their grandchildren, followed by any great-grandchildren, and so on.

The legal status of stepchildren and adopted children varies by jurisdiction. If the deceased had no offspring, the line of inheritance moves upward to their parents. If the parents are no longer alive, collateral heirs (brothers, sisters, nieces, and nephews) are next in line.

Investopedia / Sydney Saporito

The specifics of determining next of kin and inheritance vary by jurisdiction. Matters involving inheritance in certain countries, such as the United Kingdom, are handled in accordance with various succession laws. In other countries, next-of-kin laws are in place for settling the estates of people who die intestate .

In the United States, the right of a relative to inherit or receive property by inheritance exists through the operation of state laws and legislative action. State law establishes next of kin relationships and inheritance priorities.

Identifying a next of kin is less important, at least legally, if the person who died (the "decedent") left a will or is (or was) married.

The legislature of a state has plenary power, or complete authority, over the distribution of property within the state borders. The deceased's estate becomes state property if no legal heir is identified.

What if someone dies in one state and owns assets in another? With personal property , the law of the state where the decedent resides generally supersedes the laws of other states.

The recipient(s) of proceeds from a decedent's life insurance policy, or their retirement accounts such as 401(k)s and individual retirement accounts (IRA) , are designated in a different way than other bequeathable assets. The funds from these instruments go to the beneficiaries listed by the decedent on these policies or accounts themselves, even if the decedent designated different people in a will.

Next-of-kin status is irrelevant unless the decedent was married and lived in a community property state. If so, by law, the surviving spouse is entitled to an equal portion of any funds earned or accrued during the marriage, unless the spouse had signed a waiver . If the spouse is also deceased, and there are no living listed beneficiaries, those assets may flow to the deceased's next of kin, depending on state law.

Certain other rules apply to individuals who inherit retirement plan assets ; however, those rules have been modified recently following the passage of the Setting Every Community Up for Retirement Enhancement (SECURE) Act in December 2019.

Prior to the passage of the SECURE Act, non-spousal beneficiaries of an inherited IRA were required to commence required minimum distributions if the original account owner had commenced taking their own required minimum distributions (RMDs) prior to their death. If the account owner had not commenced taking their own RMDs, the non-spousal beneficiary was able to wait until they had reached the age to commence taking RMDs to begin taking them.

Prior to the passage of the SECURE Act, non-spousal beneficiaries who inherited an IRA previously were able to stretch out the benefits for their lifetime; however, under the new law, IRA beneficiaries must cash out their inherited retirement account within 10 years. There are certain exceptions, such as for the chronically ill, the disabled, and children under the age of 18.

Establishing someone's next of kin is also important for law enforcement, medical officials, and other authorities when they need to make notifications about an individual's death, health, or well-being.

Being designated as someone's next of kin carries significant legal responsibilities. One of the primary responsibilities of next of kin is to make decisions on behalf of the individual in case they become unable to make decisions for themselves. This could come up prior to that person's passing, whether due to illness, injury, or incapacitation.

The next of kin can play a role in making serious healthcare decisions for the individual. This responsibility is particularly important when the individual is unable to communicate their wishes. Take a situation where someone is in a coma; the next of kin may be called upon to provide consent for medical treatments or end-of-life decisions.

Like we've talked about throughout this article, the next of kin may also have legal responsibilities and authority. Next of kin may be tasked with handling the individual's assets, paying bills, or managing investments. This responsibility become much more prominent when there is no will.

Next of kin and power of attorney are two distinct legal concepts that confer different roles for an individual. Next of kin typically serves as a default designation when there is no formal legal document specifying decision-making authority. On the other hand, a power of attorney is a legal document in that grants one person authority to act on someone else's behalf.

The powers granted in a power of attorney can vary widely depending on the terms of the document. They often include managing financial affairs, making healthcare decisions, or conducting legal transactions. Note that the power of attorney documentation may be for specific actions; being next of kin may designate a more broad, less defined set of responsibilities.

Another key difference between next of kin and power of attorney is the level of control and authority each confers. Being next of kin does not necessarily grant decision-making authority; you usually don't get this kind of power unless it's explicitly stated by law. Meanwhile, a power of attorney does grant explicit legal authority and is a more formalized, enforceable way of designation responsibilities.

Why Is Determining Next of Kin Important?

Establishing the next-of-kin relationship is important because it determines inheritance rights when a person dies without a will and there are no surviving relatives, such as a spouse or children.

A person's next-of-kin may also have certain responsibilities during and after a person's life, such as making medical decisions, making funeral arrangements, and assuming control of financial affairs.

How Is Next of Kin Determined?

Determining the next-of-kin and inheritance varies by jurisdiction. In the United Kingdom, inheritance matters are handled as per succession laws. In other countries, the laws about next-of-kin help settle the estates of people who die intestate. The right of someone to inherit or receive property in the U.S. by inheritance exists by way of state laws and legislative action.

Will Next of Kin Automatically Get Life Insurance and IRA Benefits?

In most cases, the next-of-kin status doesn't matter. This means that the proceeds from life insurance policies and retirement accounts are transferred to the beneficiaries named by a decedent even if the decedent designates different people in their will.

This changes if the decedent is married and lives in a community property state. In this case, the surviving spouse is legally entitled to an equal portion of any funds earned or accrued during the marriage, unless the spouse signs a waiver.

Next of kin refers to a person's closest living relative, which usually includes individuals with a shared bloodline, such as children or cousins, or those with a legal standing, such as adopted children or a spouse.

In estate planning, next of kin is important in that next of kin typically takes precedence over any other individuals for an inheritance, usually when a will does not exist. Each country and sometimes different jurisdictions within the country have different inheritance rights. Most often, the spouse inherits the estate. If there is no spouse, then it is usually the children. If there are no children, the next of kin relationship continues to find the closest living blood relative.

Cornell Law School, Legal Information Institute. " Next of Kin ."

Cornell Law School, Legal Information Institute. " Inheritance ."

American Bar Association. " Introduction to Wills ."

KMPG. " Recent Developments in Europe: International Estate and Succession Planning Trends ."

Legislation.Gov.UK. " Intestates' Estates Act 1952 ."

American Bar Association. " The Probate Process ."

U.S. Department of Labor. " FAQs About Retirement Plans and ERISA ," Page 8.

Congressional Research Service. " Inherited or 'Stretch' Individual Retirement Accounts (IRAs) and the SECURE Act ."

internal Revenue Service. " Part 25. Special Topics, Chapter 18. Community Property, Section 1. Basic Principles of Community Property Law ," Select "25.18.1.2.3 (05-03-2023): Community Property States" and "25.18.1.3.13 (02-15-2005): When the Character of Property Is Determined."

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debt transfer to next of kin

Who's the next of kin in case of inheritance?

The next of kin concept isn't complicated, but it does vary by state and also determines who inherits if you die without a will.

Find out more about Last Wills

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by   LegalZoom staff

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Updated on: January 30, 2024 · 6min read

What is next of kin?

Next of kin order, why does next of kin matter, inheriting property as next of kin, faqs about next of kin, estate planning made simple for your next of kin.

Writing a will and naming beneficiaries are best practices that give you control over your estate. If you don't have a will, however, it's essential to understand what happens to your estate. Generally, the decedent's next of kin, or closest family member related by blood, is first in line to inherit property.

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In this guide, we'll explore the meaning of next of kin and its implications on estate plans.

Next of kin is a legal term referring to a deceased person's closest living relative. Next of kin will only come into play if  someone passes away without a will —this legal process is known as intestate succession. If someone dies without having any named beneficiaries, the next of kin gets priority when receiving the inheritance from an estate.

While adopted children and spouses aren't blood relatives, many states consider them next of kin. But the exact criteria for next of kin varies by jurisdiction and local policy.

How is next of kin determined?

Your next of kin is often the closest living relative. The order of closest relative generally goes:

  • Adopted and biological children
  • Other blood relations

Proving who is next of kin also requires proof of identity, such as a birth certificate or government-issued photo ID. You may also need an affidavit from someone who can swear to the blood relationship with the decedent.

If you have a surviving spouse, they are often first in line to inherit your estate if you die without a will. Sometimes the spouse may inherit the entirety of the estate, especially if you have no surviving children or parents. In other cases, your children, surviving parents, and siblings have the first claim to next of kin.

debt transfer to next of kin

Beyond surviving spouse and children

Your next of kin may extend further down your bloodline if you have no surviving spouse or children. State law varies, but these next of kin generally include:

  • Grandchildren
  • Grandparents
  • Aunts and uncles
  • Nieces and nephews
  • Cousins, if there are no other surviving heirs
  • The "great" generations may also inherit under some state intestacy laws—great-grandchildren, great-grandparents, great-aunts, and great-uncles

What happens if your next of kin is a minor?

If your  next of kin is a minor , a probate court will appoint a conservator to oversee the management of assets. Once the child reaches the age of majority, your assets will pass down to them.

Next of kin status establishes inheritance rights when someone dies without an estate plan. While wills can simplify estate management, not everyone has a will in place. In these situations, the next of kin has rights and responsibilities involving the estate.

Note:  Establishing who is next of kin becomes complicated when multiple children or siblings qualify. In these cases, candidates can volunteer if they accept the rights and responsibilities listed below.

Next of kin rights

The rights afforded to the next of kin include:

  • Funeral arrangements:  The next of kin will often have the final say in funeral decisions for the deceased.
  • Medical decisions:  If someone is incapacitated and left  no advance medical directives , the next of kin can decide their treatment.
  • Obtaining a letter of administration (LOA):  The next of kin can obtain an LOA to act as the administrator of an estate and control its assets.

Next of kin responsibilities

In exchange for the above rights, the next of kin is responsible for:

  • Probate filing:  The next of kin will  initiate the probate process . From here, they can hire an attorney.
  • Acting as a point of contact:  The next of kin will often respond to legal, medical, and personal questions about the deceased.
  • Tallying assets and debts:  The next of kin needs to research the decedent's finances, debts, and valuable assets.

debt transfer to next of kin

An heir may need a  next of kin affidavit  to get an inheritance. This notarized document establishes the heir's claim to estate property. Depending on the jurisdiction, this affidavit may be sufficient to legally transfer some types of property to the heir.

Real property usually requires further documentation to transfer ownership. This may include a copy of the deceased's death certificate, a notarized deed, and probate documents. Real property consists of:

  • Any buildings on the property
  • Any plants on the land
  • Roads, sewers, fences, and other manmade structures

Will the next of kin go through probate court?

Whether or not someone dies with a will, their assets usually have to go through probate court. While some states make exceptions for small estates, large ones call for a probate court to appoint an administrator who distributes the assets and closes the estate. Usually, this person is next of kin, such as a spouse or child.

After receiving a letter of administration (called "letter of testamentary" if there is a will), the administrator pays off the deceased's debts, if there are any, and handles the paperwork to transfer assets according to state intestacy laws.

Probate vs. nonprobate assets

Not every asset has to go through court. Common nonprobate assets include:

  • Assets placed into a trust
  • Insurance payouts
  • Retirement savings
  • Certain bank accounts with beneficiaries

These assets must almost always go through probate court:

  • Personal collections and possessions like clothing or jewelry
  • Titled assets in the deceased's name
  • Real estate

We've answered some common FAQs about the complete next of kin meaning or establishing who is next of kin.

What does next of kin mean for adopted children vs. blood relatives?

Children adopted legally count as heirs under next of kin laws. These policies make no distinction between biological and adopted relations. So, if the deceased has an adopted and biological child, the state treats them the same.

The same legal principle works in reverse. If the deceased person was adopted into a family, the adoptive family members could act as the next of kin. In both cases, legal adoption stands at the same level as biological relation.

Can a friend or unmarried partner be your next of kin?

Unmarried partners and friends aren't considered next of kin. If you want them to receive your assets after death,  name them as a beneficiary  in your will or estate plan.

What is the difference between next of kin vs. beneficiaries?

Your next of kin are your closest surviving relatives, but a beneficiary is anyone named to receive something in estate planning documents. Keep in mind:

  • When writing a will, you can name beneficiaries at your discretion.
  • Conversely, you don't have a say over your next of kin.

Will the next of kin inherit debts?

Family members aren't legally obligated to pay debts a deceased individual owes. Even with married couples, a surviving spouse doesn't have to pay unless it's a shared debt in their name.

Money that a deceased individual owes comes directly from their estate. The remaining balance typically goes unpaid if an estate can't cover the total debt.

Can you refuse to be next of kin?

Anyone can refuse to act as a deceased relative's next of kin. In this case, the role passes on to the next candidate in line. The state may claim the deceased's property if no one accepts the position.

While next of kin is a straightforward concept, your best bet is to execute a last will and testament to have a say in where your assets go.

With the proper estate documents, you'll have peace of mind now and save your loved ones bureaucratic hassle and potential disputes. LegalZoom's experts give you the forms and information you need to execute a complete estate plan.

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Dealing with debts after a death. The financial impact of bereavement

The death of someone close to you can have a devastating effect on several areas of your life. Not only does it effect you emotionally, it can take a real toll on your wellbeing, your plans for the future, and your finances. 

Bereavement often creates a lot of uncertainty around what happens to the person’s debts or assets when they die. We know that it's hard to make sound decisions when a loved one passes away. As with all life changes that you may encounter, we can provide debt help and support.

Are you struggling with debt after the death of a loved one?

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Unsecured debts and death

If a person dies and leaves behind unsecured debts (finance like personal loans and credit cards) what happens to these will depend on whose name the debts were in, and whether the person had any assets like investments, savings or a house.

If the debts were in their name only

If the debts were only in the name of the person who has died, then these debts will either:

  • be written off if the person didn’t have any assets, or
  • need to be repaid if the person has left an estate (this could be anything from savings to a share in a house)

If your husband, wife or civil partner has died and they had a debt that was in their name only, you won't become responsible for it.

If they left a will, any beneficiaries named in it will only receive their inheritance once funeral costs have been covered and debts have been repaid.

If the debts were joint with you or someone else

If you or someone else was named on the credit agreement, that person will become responsible for repaying the full amount of the debt.

A credit card will only ever be in one name, but your credit card provider may have allowed you to have a second card for your partner or someone else to use. If someone else's name is attached to the card, they'll be a second card holder. In these cases the second card holder won't be responsible for paying any of the debt spent on either card.

A few points to remember about bereavement and money

  • When someone dies, it's important that you notify their creditors about the situation. Write a letter to explain what's happened and let them know you'll be in touch later to find out what else needs doing. Creditors are normally sympathetic as long they're kept updated.
  • A person's estate is made up of any money they have in bank accounts or savings, any assets they have (like cars, caravans, antiques or jewellery) and any property they own. This could include a house that's in their name or one that's jointly owned with someone else.
  • Always check to see if the deceased person’s debts are covered by a life assurance policy (which might repay a mortgage ), personal protection insurance (which might cover loans or credit cards ) or if they’re entitled to a 'death in service' payment from a pension or employer (which would provide a lump sum of money).

How is a deceased person's estate handled?

A person’s estate is made up of their money (including any insurance pay outs), investments, any property they own (or jointly own) and their possessions.

The money in their estate will be used to cover any funeral and administration costs first. If there’s any money left after this it'll need to be paid towards any debts the person had.

In some situations if there's money tied up in a property, the creditors could ask for the house to be sold and the money repaid from the sale. If you don’t want the house to be sold, then you would need to come to an arrangement with the creditor to repay the debt at a rate you can afford.

Most unsecured creditors will normally write off a debt (like a personal loan or credit card) if there's little or no money left when a person dies. They’ll normally only pursue the debt if there’s a large estate.

A personal representative may become liable for a deceased person's debts if they don't administer the estate properly.

Here are some other sites you might find useful

Cruse Bereavement Care Cruse offer specialist phone, email and face to face support for children and adults who are dealing with loss. Their website also has information on local support services in your area.

Age UK Age UK provide helpful information on the practical steps you need to take when someone dies. They have information on finding help with funeral costs and dealing with estates.

Bereavement Advice Centre The Bereavement Advice Centre can offer practical help for dealing with a deceased person's affairs.

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If you're dealing with debt after the loss of a loved one, please know that you're not alone. Over 30 years we've helped thousands of people across the UK deal with their debt problems. We'll do all we can to support you and help you get things back on track.

Take two minutes to answer a few simple questions , so we can understand the right way to help you. Alternatively, our team of advisors can go through your budget over the telephone and recommend a debt solution that's most beneficial for you. 

Related articles

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Debts after death

This fact sheet covers  England & Wales .  You will need different advice if you live in Scotland .

Use this fact sheet to:

  • find where to get the support you need;
  • understand if you may be liable for someone's debts when they die;
  • understand how home ownership is affected by a person's death; and
  • find out what kind of bills and debts might need dealing with.

If you have been affected by bereavement, it’s important that you get the emotional support you need. The Cruse Bereavement Care freephone national helpline is staffed by trained bereavement volunteers. Call them on 0808 808 1677.

Our service is always free. If you have any questions or need advice, call us on 0808 808 4000 .

Steps to take after someone has died

Trying to sort things out after the death of a loved one can be distressing. If you find you are struggling, try and find a friend or family member that can help you.

If you are unable to find anyone who can give the help you need, MoneyHelper offer practical advice and support to anyone following bereavement. They cover a range of topics such as what you need to do straight away after a death, registering the death and arranging the funeral.

One of the first things you’ll need to do is register the death, this needs to be done at a register office very soon after it happens. There are rules about which register office to use. See GOV.UK to find out how to register the death in more detail.

Tell Us Once

Speak to your Register Office about the Tell Us Once service, this passes information about a death to most government organisations. You report the death once and the Tell Us Once service tells most government departments. Go to GOV.UK to find out if your local register office uses the Tell Us Once service. The information you find will also tell you which organisations to contact to report the death if the Tell Us Once service is not available.

DWP bereavement service

The Department of Work and Pensions (DWP) bereavement service will check all the DWP benefits the person who has died was receiving. The service can also check whether the next of kin can apply for bereavement benefits or a funeral payment. You can contact the service on 0800 731 0469 . Please go to our Help with Funeral costs and benefits section for more information on what help you may be able to get if your partner or spouse has died.

Life insurance

You should check whether the deceased has any life insurance policies that should pay out. Any money paid out would go to either:

  • the policy holder or their estate if they have died;
  • a surviving joint policy holder if the policy is in joint names and one policy holder has died;
  • a beneficiary that was nominated by the policy holder; or

Speak to the life insurance company find out.

Other organisations that my be useful

Death notification service.

The Death Notification Service has been created to tell a number of banks, building societies and financial institutions at the same time about a person's death. The aim is to make the process secure, quick and straightforward.

If your case is particularly complicated or time-sensitive (for example, if money or property needs to be released from the estate urgently), you should discuss it with the deceased person’s bank or building society before using this service. There’s information in the Frequently Asked Questions about what you can do in this situation.

You do not need to create an account to use this service, but if you do:

  • you will receive confirmation that the information has been received by the financial institutions; and
  • if you find more accounts held by the person that has died, you can add them to your information later.

If you have any difficulties creating an account, contact the Death Notification Service Helpline on 0333 207 6574 from the UK or + 44 121 4150965 from overseas (opening hours 08:30-17:30, Mon-Fri - excluding bank holidays).

HMRC bereavement helpline

Once His Majesty's Revenue and Customs (HMRC) have been notified of the death, they will speak to the personal representative about the deceased’s tax affairs. See the Personal representative duties section for more information about personal representatives.

HMRC will be able to provide details of:

  • any pension or employment income;
  • details of any bank accounts; and
  • copies of the last tax return (if the deceased was in Self Assessment.)

My Lost Account

My lost account is a free service that can help find bank accounts that have not been used for three years or more. This may be useful if you are handling the deceased persons finances as you can check if they had any accounts you are unaware of.

The Pension Tracing Service

The Pension Tracing Service is a fee service that can help find unclaimed pension pots. This may be useful if you are handling the deceased persons finances as you can check if they have any pensions you are unaware of.

What happens to debts when someone dies?

If the debts are in the deceased person’s sole name and they have no assets, the debts will not be owed by anybody else when they die.

If the debts are joint or someone has acted as a guarantor, then the surviving person or guarantor will be liable for these debts. If you have been left with debts which are unaffordable please contact us for advice.

If the deceased person has assets in their estate, joint or sole, the debts become a liability on the estate. The executor of the estate is responsible for paying outstanding debts from the estate. Find out more in our Dealing with the estate section.

Dealing with debts if there is no estate

The estate is made up of assets that have been left behind. Assets can include:

  • property and land;
  • money in bank accounts; and
  • personal possessions.

If there is no estate, you or a third party cannot be held liable for debts if you did not take them out jointly or did not act as a guarantor.

Contact any organisation that is owed money and inform them of the death. You are able to inform most organisations online, they will want a copy of the death certificate and details. Inform them that there is no money in the estate and ask them to confirm that the account is closed. You can use our Write off after death sample letter to help you.

More detail on dealing with different types of debt can be found later in this fact sheet.

If there is no money in the estate to help you arrange a funeral please see our Help with Funeral costs and benefits section.

Dealing with the estate

If the person who has died left a will, it should say who the executor of the will is. To distribute the estate, the executor will need to apply for probate. In England and Wales this called ‘Grant of probate.’

The cost to apply for probate is £273 if the estate is valued at over £5,000 . The fee is usually paid for out of the estate, if there is enough money to do so. There is no fee if the estate is valued at £5,000 or less.

You may be able to get help with the fee if you have a low income. You can find out through GOV.UK .

You can apply for probate through GOV.UK .

Applying for probate may not be necessary in all circumstances, for example:

  • there are no assets;
  • if the estate is small, usually less than £5,000; or
  • all the assets in the estate were held as joint tenants and so pass by means of survivorship (see the Joint property section below).

If the estate is complicated you may wish to use a probate specialist, though these can be expensive.

If the person who has died has not left a valid will, people close to them may be able to apply to court to get permission to deal with the estate. This person will be called an administrator. The law sets out who can apply to be an administrator in order of priority, including any surviving husband or wife, children, father, or mother and so on. A full list of who can apply can be found on GOV.UK .

Whoever deals with the estate is known as the personal representative.

If you are the personal representative and do not wish to continue to act as one, you may be able to step down. This will depend on the exact situation, so if you are considering this contact the probate helpline first.

Personal representative duties

The personal representative is able to pay for funeral expenses and administration costs out of the estate before paying any of the deceased person’s creditors. The full list of personal representative responsibilities are as follows.

  • List all assets and liabilities of the deceased.
  • Work out the amount of Inheritance Tax (if any).
  • Apply for grant of probate/letters of administration.
  • Collect in all assets.
  • Pay funeral expenses and administration expenses.
  • Pay beneficiaries.
  • Prepare estate accounts. GOV.UK has more on this.

Inheritance Tax

Inheritance Tax will need to be paid before probate can be granted. Inheritance Tax is not payable on estates worth less than £325,000. This limit can increase depending on the exact situation. Property which is left to a spouse is exempt from Inheritance Tax. Use the Which calculator to work out if any Inheritance Tax needs to be paid.

Liabilities

As well as assets, the deceased’s liabilities will from part of their estate. Any liabilities could reduce the value of the estate for Inheritance Tax purposes and have to be dealt with by the personal representative.

Liabilities could include, amongst other things:

  • a mortgage;
  • rent arrears;
  • credit cards; and
  • utility bills.

We cover how these liabilities should be dealt with later on in this fact sheet .

Paying creditors and beneficiaries

The personal representative needs to pay creditors of the deceased before payments are made to any beneficiaries, if this isn’t done they could become liable for the debt.

Asking creditors to submit claims through an advert in The Gazette and local newspaper will help protect the personal representative from liability, but at least two months should be given for creditors to come forward. You can find out more through The Gazette .

Once creditors have been paid, the personal representative can pay any remaining estate to the beneficiaries set out in the will.

If there is no will then the distribution of the estate will be based on the rules of ‘intestacy’. You can find out more about the rules of intestacy through Citizens Advice .

If you are living with someone but not married or in a civil partnership, this may mean you won’t receive anything from an estate.

GOV.UK has a tool which can help you find out who inherits if someone dies without a will .

If a creditor or beneficiary suffers a loss as a result of the personal representative not following the correct process, they may make a claim against the personal representative. As this can be a complicated area you should get legal advice if needed. You can find a solicitor through the Law Society .

Insolvent estates

An estate is called 'insolvent' if the total needed to pay the funeral costs, administration costs and debts is greater than the total value of the assets.

Insolvent estates can be complicated and difficult to deal with. You may need specialist legal advice. You can find a solicitor through the Law Society .

If the personal administrator decides to pay creditors from an insolvent estate, they must do so in the following order.

  • Secured creditors.
  • Reasonable funeral, administration and testamentary expenses. Testamentary expenses can include things like probate fees and solicitor fees.
  • Preferred and preferential debts. For example employee wages, if the deceased person employed someone.
  • Unsecured creditors.
  • Interest due on unsecured loans.
  • Deferred debt, such as an informal loan between family members.

If there are insufficient funds to pay all the unsecured lenders in full, they should be paid on a pro-rota basis. This means that the debts will be paid proportionally, with the largest lender receiving the largest share and the smallest lender the smallest share. Failure to follow this order may mean they incur personal liability for some of the debts not paid.

If the deceased person has left a property which is jointly owned, it will be owned in one of two ways.

Tenants in common

Each owner will have a defined share of the property. The shares will usually be set out in the deeds. When one owner dies, their share does not automatically pass to the surviving owner. The deceased person’s share will form part of the estate and will be available to pay creditors and those named in any will. It may be possible for the co-owner to offer to pay the debts to avoid the property being sold. If you need to negotiate, contact us for advice.

Joint tenant

Each owner owns all of the property. When one owner dies, their share does automatically pass to the other owner. It does not form part of the estate available to creditors. Therefore, the property is not taken into account when working out whether the estate is insolvent.

If you are unsure how the property is owned then you should contact land registry to find property ownership information, there is a cost of £3 .

Property in insolvent estates

If the estate is insolvent, the creditor could apply to court to recover the deceased person's assets, this would include the deceased share of the property. This is called an insolvency administration order, the creditor has five years to apply from the date of death.

For tenants in common, insolvency administration orders are very unlikely as the deceased persons equity will already form part of the estate.

Creditors do not apply for insolvency administration orders very often but it may be more likely for joint tenants as the deceased persons equity passes to the surviving owner. If a creditor threatens to do this, any surviving owner may need to try to negotiate with the creditor to prevent them making this application. The surviving owner could offer to pay a debt by instalments or offer a lump sum. If you need to negotiate, contact us for advice.

What happens to rented property after death?

Tell the council or housing association about the death, the Tell us once service can help you with this.

If the property is a council or housing association tenancy and there is a joint tenant, the joint tenant should automatically take over a tenancy. If there are any arrears the joint tenant will be liable to pay them. Rent arrears should be treated as a priority debt and an arrangement should be made to reduce the arrears at an affordable amount.

If the tenancy was a sole tenancy in the deceased person’s name then any arrears should be paid by the estate. If there isn’t money in the estate to pay the arrears, they don’t need to be paid.

In some circumstances a husband or wife, partner or a member of the tenant’s family may be able to ‘succeed’ or inherit the tenancy, if they have been living there when the tenant died.

If you are liable for rent arrears and are unable to afford repayments contact us for advice.

If you live in England , see our Rent arrears - England fact sheet for more information.

If you live in Wales , see either our Rent arrears for standard occupation contracts - Wales fact sheet or Rent arrears for secure occupation contracts - Wales fact sheet for more information.

Ending tenancy England

In England, a tenancy will not end when a person dies and no one inherits it, the landlord or the person handling the affairs of the tenant that died can end the tenancy.

If someone has been living in the property and no one inherits the property, they have a right to stay in the property until the tenancy is ended by the landlord or the person handling affairs of the tenant that died.

For more detailed information about dealing with a tenancy after death, contact Shelter on 0808 800 4444 .

Ending tenancy Wales

In Wales, if a sole contract-holder dies, the occupation contract will usually end one month after the death of the contract-holder. The personal representative can end the occupation earlier by giving notice to the landlord.

There are some exceptions to this, for example if the contact can be succeeded or for some fixed-term standard contracts that include a provision to transfer the contract on death to a third party.

For more detailed information about dealing with a tenancy after death, contact Shelter Cymru on 08000 495 495 .

What happens to energy bills after death?

Tell the energy company about the death as soon as you can. Most energy companies will have an online form that you can complete. The form will ask for contact details, details of the deceased, whether gas and electricity will continue to be used at the property and details of the executor of the estate.

If there is jointly owned or jointly rented property, the person still living there will be liable for the ongoing bill.

Anyone who was already named on the bill will be liable for any gas or electricity arrears. Gas and electric arrears should be treated as a priority because you can get disconnected.

See our Energy debts fact sheet for more information. If you now have energy arrears which you cannot afford to repay, contact us for advice.

If the energy bill was in the deceased person’s sole name, any arrears should be paid by the estate. If there isn’t enough money to do this, the money will no longer be owed.

If your name is not on the bill and the energy company tries to argue that you have benefited from the energy supply and so should pay the bill, contact us for advice.

What happens to water bills after death?

Tell the water company about the death as soon as you can. Most water companies will have an online form that you can complete. The form will ask for contact details, details of the deceased, whether water will continue to be used at the property and details of the executor.

Any joint occupier will also be responsible for the ongoing bill, the name(s) on the bill should be changed by the water company.

If there are any arrears, the joint occupier will also be responsible for these. Water arrears are a non-priority debt because the supply can’t be disconnected if there is still someone living in the property. See our Water arrears fact sheet for more information.

Any liable person would need to pay the on-going water bill and offer an affordable amount to any arrears. If you have been left with a water bill that you will struggle to pay, please contact us for advice.

If the water bill was in the deceased person’s sole name, any arrears should be paid by the estate. If there isn’t enough money to do this, the money will no longer be owed.

What happens to council tax after death?

Let the council know about the death as soon as you can.

If a rental property had been solely occupied by the person that has died, liability usually falls to the owner or leaseholder.

If the property was solely owned by the person that has died, it will be exempt from council tax payment as long as it remains unoccupied and until probate is granted. Once probate is granted a further six months' exemption may be possible as long as the property remains unoccupied.

If the person who has died lived on their own, any arrears will be paid out of the estate. If there isn’t enough money to do this, the money will no longer be owed.

A partner of the person who dies will be responsible for the ongoing bill, but can claim a 25% discount if they are the only adult in the house.

They will also be liable for any council tax arrears if they were living in the house, even if their name is not on the bill. If the person was not named on the bill, the council will have to send a new bill in their name before they can recover any outstanding council tax. Council tax arrears are a priority debt, the council will want the ongoing council tax paid plus an extra amount to clear the arrears. See our Council tax recovery fact sheet for more information.

If you have council tax arrears that you will struggle to repay, please call us for advice.

What happens to benefit overpayments after death?

If someone who dies was claiming benefits, make sure that the Department for Work and Pensions (DWP) and the council know that they have passed away. This can be done through the ‘ Tell Us Once ’ service. See the earlier section Steps to take after someone dies .

Sometimes the DWP may say that they have paid the person who died too much benefit. This means there will be a debt called a benefit overpayment.

It is important to understand why the DWP or council say that a benefit overpayment has happened. Contact us for advice about whether their decision is correct.

If only the deceased person is liable, it can be recovered from the estate. If there isn’t enough money to do this, the money will no longer be owed.

What happens to hire purchase agreements after death?

Hire purchase agreements are usually used to buy cars, but some shops sell household goods on hire purchase too. The goods do not belong to you until you make the final payment.

Check the agreement to see if it is a hire purchase agreement before returning the goods to the creditor and contact us for advice.

Check to see if there is an insurance policy that pays off the agreement if the person hiring the goods dies. If there is an insurance policy, the credit agreement may be paid off and the goods would then become part of the estate.

Dealing with a hire purchase agreement after someone dies can be complicated. Contact us for advice about finding the right type of help.

What happens to credit debts after death?

Only a person who has signed the credit agreement can be held liable for credit debts such as credit cards, overdrafts, unsecured loans and catalogues. Any money owed by the person who died can be recovered from their estate. If there is not enough money in the estate to clear the debts in full, see our Insolvent estate section earlier in the fact sheet.

Let the lenders know about the death. You can use the Death Notification Service to notify several banks and building societies at the same time. Most major banks are part of the Death Notification Service. For more information on the Death Notification Service, see our Steps to take when somebody dies section earlier in the fact sheet.

Many lenders also have an online form you can use and bereavement specialists who can help. The lender will also ask for a copy of the death certificate.

If the debts are in joint names or had a guarantor, the surviving person or guarantor will become solely liable for them. If you have debt which you are unable to repay, please contact us for advice.

Help with funeral costs and benefits

Funeral expenses.

If the funeral has already been paid for, or money has been left in the estate to cover it, the executor of the estate will pay the funeral bill.

If there isn’t money to do this then a friend or relative will usually pay for the funeral and claim the funeral costs back from the estate, if there is enough money in it. If the person who has died has other debts, reasonable funeral costs can be paid first.

Check with the executor of the estate before paying for a funeral to see if there is enough money in this estate to claim back. The amount of money in the estate may affect the amount you decide to spend on the funeral.

If you are arranging a funeral and you are on a low income, you may be able to get help through a Funeral Expenses Payment. How much you get depends on your circumstances. For more information and to claim go to GOV.UK .

If arranging a funeral is unaffordable, a Public Health Funeral may be arranged. The local authority will usually decide the time and place. Speak to your local council about this.

Depending on your situation you may be able to claim extra income or reduce your outgoings.

  • If your spouse or civil partner dies you may be able to claim bereavement support payment. The amount you get will depend on your situation; it’s paid for 18 months following the death.
  • If you have had a drop in income, you might be able to claim Universal Credit to help.
  • If you are the only adult in the property, you may be able to claim a 25% discount on your council tax bill.

The Tell Us Once service can check whether you are able to get help with funeral costs and what benefits you may be able to claim. You can also do a full benefits review through Turn2us .

Useful contacts

Cruse Bereavement Care Phone: 0808 808 1677 www.cruse.org.uk/get-support/helpline

Death Notification Service Phone: 0333 2076574 www.deathnotificationservice.co.uk

GOV.UK For information about the steps to take after someone dies www.gov.uk/after-a-death

For information about dealing with someone’s affairs after they have died. www.gov.uk/wills-probate-inheritance

HMRC bereavement helpline For help with tax after someone dies Phone: 0300 200 3300

HMRC Deceased estate helpline For specialist advice about income and capital gains tax on someone’s estate. Phone: 0300 123 1072

Law Society Phone: 020 7320 5650 www.lawsociety.org.uk

MoneyHelper Phone: 0800 138 0555 www.moneyhelper.org.uk/en/family-and-care/death-and-bereavement

Shelter Phone 0808 800 4444 www.shelter.org.uk

Shelter Cymru Phone 08000 495 495 https://sheltercymru.org.uk/contact-us/

Turn2us www.turn2us.org.uk

Other fact sheets which may help you

Council tax recovery

Energy debts

Rent arrears - England

Rent arrears for secure occupation contracts - Wales fact sheet

Rent arrears for standard occupation contracts - Wales fact sheet

Water arrears

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How to pay off $20,000 in credit card debt in 3 years or less

By Joshua Rodriguez

Edited By Angelica Leicht

February 15, 2024 / 12:29 PM EST / CBS News

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Credit card debt can be easy to accumulate, especially in today's inflationary environment. And,  nearly half of the American population owes balances to credit card companies  right now. About 56 million of them have had revolving debt for more than a year.

If you're facing a significant amount of debt, you may be searching for ways to pay it off quickly . And, that makes sense considering that these revolving accounts can be costly thanks to the high interest rates they often come with .

But what if you have $20,000 in credit card debt and want to pay it off in three years or less? What are some ways to do that?

Find out how debt relief could help you pay off your credit card balances . 

If you have $20,000 in credit card debt that you need to pay off in three years or less, you have multiple options to consider , including:  

Take advantage of a debt relief service

One potential way to get out of debt quickly is to take advantage of what a debt relief service offers. If you don't see a feasible way to pay off your credit card balances, a debt relief program may make doing so possible. 

Debt relief companies typically offer one, or both, of the services below: 

  • Debt management : Debt management, also known as debt consolidation , involves experts who negotiate with your lenders in an attempt to reduce your interest rate. They typically create an affordable, effective payment plan to help you pay off your debt as quickly as possible.  
  • Debt forgiveness : Credit card debt forgiveness , or debt settlement, is a program that involves negotiations with your lenders in an attempt to reduce your total balance owed, resulting in those lenders forgiving a portion of your debt. Though these programs can hurt your credit score and have potential tax implications, they are a viable option for borrowers who are struggling to make their credit card minimum payments. 

With either option,  debt relief companies typically attempt to get you out of debt within 24 to 48 months. So, it's likely that they'll be able to help you pay off your $20,000 in debt in three years or less.   

Compare leading debt relief service providers today . 

Consolidate your debt with a home equity loan

It may also be smart to look to your home equity as a potential credit card debt solution . 

"Leveraging a home equity loan is a good option when it comes to debt consolidation," says Eileen Tu, VP of product development at Rocket Mortgage. "Oftentimes, unsecured lines of credit such as credit cards carry higher interest rates as compared to home equity loans."

Interest has a big impact on the time it takes to pay off credit card debt, so using a home equity loan to reduce your interest rate could save you time and money. So, using your home equity to "consolidate those debts into a lower interest rate can make sense," says Tu. 

Considering the difference between the average home equity loan interest rate  — which averages 8.97% today — and the average credit card interest rate — which is over 20% currently — a home equity loan that is used to consolidate your credit card debt could make it easier to pay off what you owe. Doing so could also make it more realistic to pay off your $20,000 in credit card debt in three years. 

Take advantage of 0% balance transfer credit cards

If you have a good credit score and aren't struggling to make your minimum payments but want to pay your debts off quickly, a balance transfer credit card could help . These credit cards often have promotional 0% rates or low interest rates that can make it easier to pay off what you owe. 

So, it can make sense to consider transferring your debt to a balance transfer credit card with 0% interest to help you pay it off faster. If you haven't paid off the full balance by the time the promotional interest rate expires, look for a new balance transfer credit card with a 0% promotion to transfer your balance to — and continue doing so until you pay your debt off. 

Keep in mind that at 0% interest, you would need to pay over $550 per month to pay $20,000 off in three years. Moreover, balance transfer credit cards typically come with transfer fees. So, you'll need to consider these fees as part of the debt repayment plan. 

The bottom line

It can feel overwhelming to have $20,000 in credit card balances that need to be paid. You don't have to struggle with your debt forever, though. By taking advantage of one of the options above, you may be able to pay off what you owe in three years or less. 

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Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he's not working, he enjoys time with his wife, two kids, three dogs and 10 ducks.

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  1. Debts and Deceased Relatives

    Articles Vea esta página en español Article Debts and Deceased Relatives After a relative dies, the last thing a grieving family member wants is a call from a debt collector asking them to pay a loved one's debt. Here's what to know about the rules and your rights when a collector contacts you about a deceased relative's debts.

  2. What Happens to Debt When You Die?

    1. What happens to debt after death? 2. Is debt forgiven when you die? 3. Is your family responsible for your debt when you die? When someone passes away, their unpaid debts don't just go away. It becomes part of their estate. Family members and next of kin won't inherit any of the outstanding debt, except when they own the debt themselves.

  3. Does a person's debt go away when they die?

    last reviewed: AUG 02, 2023 Does a person's debt go away when they die? English Español When someone dies, their debts are generally paid out of the money or property left in the estate. If the estate can't pay it and there's no one who shared responsibility for the debt, it may go unpaid.

  4. Can You Inherit Debt?

    Key takeaways A deceased person's debt doesn't die with them but often passes to their estate. Certain types of debt, such as individual credit card debt, can't be inherited. However, shared debt will likely still need to be paid by a surviving debtholder.

  5. Can You Inherit Debt?

    Key Takeaways Certain types of debts can be passed down based on how the debt is owned. During the probate process, the executor of the estate sorts out assets and expenses. Assets that go through probate may be used to take care of outstanding debts. Collection agencies aren't allowed to pursue relatives for the deceased person's debts.

  6. What Happens to Your Debt When You Die?

    If you have credit card accounts in your name only, the credit card companies can make a claim to get paid through your estate. "If there is no estate, no will and no assets—or not enough to ...

  7. What Happens to Your Debts After You Die?

    Co-signers on a loan. Joint owners or account holders. Spouses in community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Community...

  8. Can You Inherit Debt From A Loved One?

    Updated: September 11, 2023 | Bill Fay Home > Debt Help Advice > Can You Inherit Debt? Statistically speaking, almost three out of four people are going to die with debt, which raises a very real concern for spouses and children of the deceased: Can you inherit their debt? Good news: In nearly all circumstances, you won't!

  9. What Happens to A Deceased Relative's Debt When They Die?

    In the end it falls on the estate to pay the decedent's debt. If the debt is forgiven, it becomes ordinary income reportable on the estate's fiduciary income return regardless if a Form 1099-C was issued by the creditor. If the estate is insolvent, it may be able to exclude the cancellation of debt under Section 108 (a) (3) of the IRC.

  10. Debt After Death: What You Should Know

    By Michael Aloi, CFP®. published November 02, 2020. If you are concerned about incurring debt after a family member's death or are worried how your own debt will impact your family, here are ...

  11. Medical Debt After Death: Who's Responsible?

    Generally, any debts a deceased person leaves behind get paid out of the individual's estate. If there's not enough money or assets in the estate, debts typically go unpaid. That means relatives are usually not required to pay their deceased loved one's debt — but there are some exceptions.

  12. Next of Kin: Who It Is, What It Means for Estates

    Next of kin is a legal term referring to a deceased person's closest living relative by blood, marriage or legal bond (such as adoption). Spouses are often first.

  13. Does next of kin have to pay debt?

    Does next of kin have to pay debt? Asked by: Gerardo Eichmann | Last update: February 9, 2022 Score: 4.4/5 ( 60 votes ) As a rule, a person's debts do not go away when they die. Those debts are owed by and paid from the deceased person's estate. By law, family members do not usually have to pay the debts of a deceased relative from their own money.

  14. Credit Card Debt After Death: Who's Responsible?

    After someone has passed, their estate is responsible for paying off any debts owed, including those from credit cards. Relatives typically aren't responsible for using their own money to pay off credit card debt after death. But they may be on the hook in some cases, like if they had a joint account with the deceased person or are a ...

  15. What Happens To A Mortgage When Someone Dies

    Will your next of kin be responsible for your mortgage debt? What will happen to your surviving family members who still live in the home? Let's review what happens to your mortgage when you die and how to plan ahead to avoid mortgage issues for your heirs.

  16. How Property is Transferred After Death Without a Will

    Intestate succession laws vary by state, but your property will generally pass to your next of kin or the state if no relatives can be found. Without a will, probate — the process of...

  17. What (and Who) Is Next of Kin, and Why Does It Matter?

    The term next of kin usually refers to a person's closest living relative (s). Individuals who count as next of kin include those with a blood relation, such as children, or those with a legal...

  18. Who's the next of kin in case of inheritance?

    Next of kin is a legal term referring to a deceased person's closest living relative. Next of kin will only come into play if someone passes away without a will —this legal process is known as intestate succession. If someone dies without having any named beneficiaries, the next of kin gets priority when receiving the inheritance from an estate.

  19. What Happens To Debt After I Die?

    Once the deceased's bank and/or creditors have been informed of the death, any regular repayments should stop. If the deceased had a joint debt, such as a joint mortgage with another person, their name can be removed from the debt. 2. Check if the deceased had any life insurance cover.

  20. Dealing with the debts of someone who has died

    Step 2: check if there's insurance. The next step is to check if the person took out any insurance to pay off the debt. For example, a life insurance to pay off the mortgage in case of death. You should do this no matter what kind of debt it is.

  21. Debt After a Bereavement & Death. Advice From StepChange

    A bereavement or death in the family can cause money worries & debt problems. Free expert advice on what to do next. StepChange, the leading UK debt charity. We aim to make our website as accessible as possible. However if you use a screen reader and require debt advice you may find it easier to phone us instead. Our phone number is 0 8 0 0 1 3 ...

  22. Fact Sheet

    DWP bereavement service. The Department of Work and Pensions (DWP) bereavement service will check all the DWP benefits the person who has died was receiving. The service can also check whether the next of kin can apply for bereavement benefits or a funeral payment. You can contact the service on 0800 731 0469.

  23. How does next of kin transfer responsibility to another family member

    How does next of kin transfer responsibility to another family member who is not next in succession? My Father is next of kin for his son, my brother. My brother was never married, but has a 2 year old child. Since the child is not old enough, is my Father acting as his representative?

  24. How to pay off $20,000 in credit card debt in 3 years or less

    There are a few ways to pay off $20,000 in credit card debt within the next few years. Find out more here. ... Take advantage of 0% balance transfer credit cards.