Estate planning serves many critical purposes, such as helping you manage your property and assets while you are alive. Many Louisville residents do not realize that debt is also part of a person’s estate. Those who understand this usually want to find out how much of their debt loved ones will inherit.
You can get authoritative answers to questions about debt after death by speaking with an estate planning attorney. You can discuss ways to minimize the financial burdens your loved ones will face upon your death. Trusts and powers of attorney play a critical role in helping reduce financial liabilities for your family.
More about the handling of liabilities after death
In most cases, your named beneficiaries will not have to pay your debts out of their funds after you die. However, you must make sure your estate planning documents clearly name each of your beneficiaries. Below you will find more information about certain debts after your death.
When it comes to credit cards, your heirs will only inherit this debt if they are joint holders of your cards. Kentucky is not a community property state, which means your survivors are not responsible for this type of personal debt.
Most lenders forgive outstanding student loans after a person dies. As such, neither your children nor your spouse will inherit the student loan debt you have yet to pay.
If you are married, your spouse will have to pay any joint tax debt owed upon your death. However, exploring various estate planning strategies may help you minimize these tax liabilities for your spouse.