If you’re like a lot of people, you don’t enjoy thinking about your own death. While you’ve probably put some thought into what will happen to your assets when you die, have you ever thought about what will happen to your debts? Will they die with you? Will they be paid by your estate? Will your spouse be saddled with the debt after you pass away?
If you have around $29,000 or $30,000 in personal debt, not including a mortgage, then you’re like the average American. If you assume that all that debt will die with you, we have unpleasant news: it is possible for your loved ones to inherit your debt, especially since California is a community property state.
Is My Family Liable for My Debt After I Die?
The answer is, it just depends. Clearly, not everyone is married. Lots of folks are divorced and not everyone has surviving children. As a general rule, whatever debt that is in your name alone will be paid by your estate when you die, that is if you have assets when you pass away. The term “estate” refers to all the assets you own at the time of your death, such as cash in bank accounts, investments, a home, automobiles, collectibles, personal possessions, etc.
“Can my spouse inherit my debts when I die?” California is a community property state, which means all assets and debts acquired during the marriage belong to both spouses equally. In California, if you pass away and you have debt, your surviving spouse is legally responsible for any debt you took on during the marriage, and this includes private student loans (but not federal student loans). All the more reason to pay off your debts or file bankruptcy if you want to avoid your loved one being saddled with your debt!
From joint credit cards to mortgages, to car loans, medical debt and everything in between. If you have questions about legal liability for debt and bankruptcy, we can help. Contact Nguyen Law Group to find the best resolution for your unique situation.