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Do family members have to pay a deceased relative’s debts?

On Behalf of | Feb 3, 2021 | Estate Planning, Wills and Trusts

Many debt collectors in Arizona would have you believe that you must pay your loved one’s debts after they pass away. In fact, family members aren’t obligated to pay mortgages, student loans, credit card debts or any other form of debt. However, there are some exceptions to this rule.

Who pays an individual’s debts after they pass away?

When an individual dies, their debts are usually paid by their estate. The executor of their will can pay off their debt through the process of estate administration. If the estate doesn’t have enough money to pay off the debt, the creditors might target the decedent’s family members. However, no matter how much creditors harass the relatives, they’re not legally obligated to pay the debt.

There are some exceptions to this rule, and probably the biggest is marriage. If the deceased individual has a living spouse, some states will require the surviving partner to satisfy the debt. Arizona is one of 10 community property states that generally view debts and assets as the marital obligation and property of both spouses. Do not automatically assume you are liable for your deceased partner’s debts, though, because Arizona laws regarding this topic are complex.

Additionally, any co-signers on a loan or mortgage might have to pay off that debt. If the deceased borrowed money on someone else’s behalf or if that person greatly benefitted from the loan, the individual might have to satisfy the obligation. Ultimately, an estate planning attorney could help you figure out what will happen to your debts after you die.

Is hiring an attorney worth the expense?

Hiring an attorney can help you plan for the future, which might save your family a lot of money and stress in the long run. An attorney could explain what might happen to your estate after you’re gone and how you can prepare for this eventuality. You could leave some assets to your family members, use others to pay off debts and even give some to charity. You could also place assets in a trust that will provide for your family for years to come.