(NewsNation) — Debt can be a heavy burden, and not everyone can repay their dues in their lifetime.
Nearly half of American adults expect to die in debt and worry their loved ones will inherit the balance, according to the Policygenius 2024 Financial Planning Survey. Although debt isn’t automatically forgiven when someone dies, it may go unpaid, depending on the circumstances.
Money from their estate
The money and properties a person leaves behind often go toward the balance. If there’s no money in a person’s estate or there is no estate, however, debts typically go unpaid, according to the Consumer Financial Protection Bureau (CFB).
Who else might be responsible for the debt?
Surviving family members, including spouses, usually aren’t responsible for paying off their loved one’s debt unless they were already legally responsible for it. Examples could include if they are a co-signer on a loan, share a joint credit card account or live in a state where the law requires spouses to pay certain kinds of debt.
Some states require surviving spouses to use jointly held property to pay off their partner’s debt. Those include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska has the same requirement but only if a special agreement was signed, according to the CFPB.