What happens to debts after you die?

lg01

A family member recently passed away after an illness - he was in his 70's. He left his wife with almost nothing - they had struggled financially for a long time and he had some debts - some on a credit card and also a fairly large tax bill that he had been paying off with small amounts. The only thing is he did have a pension that is due to pay out a small amount, and a life insurance policy that should be enough take care of his wife for the rest of her days - but only just. They don't own a house they are living in a house owned by one of their children and they all have to chip in to pay the mortgage. I want to find out for them what happens to his debts - do they die with him or what happens?

Claw Hammer

lg01 wrote: »

A family member recently passed away after an illness - he was in his 70's. He left his wife with almost nothing - they had struggled financially for a long time and he had some debts - some on a credit card and also a fairly large tax bill that he had been paying off with small amounts. The only thing is he did have a pension that is due to pay out a small amount, and a life insurance policy that should be enough take care of his wife for the rest of her days - but only just. They don't own a house they are living in a house owned by one of their children and they all have to chip in to pay the mortgage. I want to find out for them what happens to his debts - do they die with him or what happens?

The debts have to be paid out of his estate.

Sleeper12

Claw Hammer wrote:

The debts have to be paid out of his estate.

Totally agree but I have a question. Is the life insurance part of his estate or is this his wife's property?

P. Breathnach

It's likely that the insurance is part of the estate, but the policy should be checked just to be sure.

Don't raise anybody's hopes, because they might be dashed again..

Marcusm

P. Breathnach wrote: »

It's likely that the insurance is part of the estate, but the policy should be checked just to be sure.

Don't raise anybody's hopes, because they might be dashed again..

Usually life insurance would have a nominated beneficiary to keep it outside the estate and to permit it to be paid directly.

Fred Swanson

This post has been deleted.

Gael23

If she is the beneficiary of the the life policy then that's hers. I would be thinking that the pension payment may not be so safe though. Also if any of the debt was in both their names,she will still be liable.