Perhaps you have a great deal of credit card debt or you are still making regular mortgage payments. In your later years, you may also have accrued significant medical debt. You know that you will not be able to repay all of your debt before you die. Like other Florida residents in the same position, you may be worried about whether your children will be required to pay off the debt you accrued during your lifetime.
NerdWallet may help to put some of these fears to rest. After your death, your estate will be used to repay creditors during the probate process, before the remainder of your estate is distributed among your heirs. If there is nothing left of the estate after creditors are paid, any remaining debt will not pass on to your loved ones – except for joint credit card accounts or loans in which you were a co-signer. If you co-signed on a child’s loan, he or she is responsible for continuing the payments. If you leave your home to a loved one, that relative can decide to continue making mortgage payments or to sell the home. The good news is that creditors cannot claim a portion of a life insurance policy you purchased for your children or retirement benefits.
You have many considerations with your estate planning, whether you have outstanding debt or want to maximize the inheritance your loved ones receive. The information in this blog is meant for educational purposes only. Therefore, it should not substitute for the advice of a lawyer.