Keep Your Family’s Future Secure

Does your debt die with you?

On Behalf of | Dec 11, 2018 | Trust And Probate Administration

When drafting a will in Palm Beach, accounting for all of your assets may seem an obvious step. Having a solid plan for the disbursement of your assets after you die should take a relatively high spot on your to-do list.

What happens to your debts upon your death? Are there directives that need to go in your will? Some debtors receive payment out of your estate. Find out what is paid and what can bleed your estate dry.


If someone inherits your home or if there is a co-owner, they could be on the hook for the mortgage. Your estate may pay off the mortgage with your assets. However, if your estate is unable to pay off the full amount, the person who receives the house may take over paying the mortgage payments. Whether that person has to qualify or not depends on the lender.


If you have an open unpaid home equity line of credit at the time of your death, the bank may require an immediate repayment. The HELOC may take priority over the mortgage depending on who the lender is for each. If an heir cannot pay the HELOC, it is possible that a bank will work with the successor to make payments, but not always.

Credit cards

The last bite of the apple comes from credit cards and other unsecured debtors. If there is money left over from the estate to pay credit cards after taxes, mortgages and the like, then credit cards get some money. In those situations where the money simply does not exist to pay them, the credit card companies have no recourse.

One other thing of note is if you have co-signers on a student loan, credit card, car loan, etc., that person may inherit the entire amount of the debt upon your death. It is well worth your time, therefore, to get your debts in order when going through the estate planning process and delineate how you want them handled where appropriate.