Question by MomOfMEY: Question about debt when someone dies…?
I’ve been thinking a lot lately…we had a baby recently and I’m just trying to get all finances in order.
1. My in laws have lots of debt (CC’s…IRS back taxes…etc) and don’t have any equity or assets because of those reasons. If something happens to them, would we have to assume responsibility to pay their debt off?
2. My husband and I both have “enough” life insurance. My husband has student loans still and a couple of vehicles in his name. If something (god forbid!) happens to him, would they make me use the life insurance money he left me to pay off the debt?
3. We do own a home, have some equity in it…but it’s just in his name b/c of the type of loan we secured 3 years ago. What happens with that?
4. My husband co-signed for some student loans for his brother about 4 years ago. If something happened to his brother, would he be responsible for the debt (his brother has since married).
Any answers would be greatly appreciated
Answer by Judy
When someone dies, all creditors have to go through the estate to collect.
Credit card companies are last – if there is no more estate – they don’t collect.
I believe, life insurance to others can not be touched.
The house, if under this name, needs to be willed to you.
May I suggest one little thing?
Next time you go to the library to get your baby some books to look at, stop by the section of WILLS.
There are some books on wills that you can copy right out of, others that have a disk that let you print out the forms with your info.
Get your hubby to sign them at home, and then take them back to the library – THE notary will sign them for free.
BuY a fire proof box – don’t lock it, and tell a family member (that does not live with you) where the box is.
Also, I hope your hubby updated your child on the life insurance policy as a new beneficiary.
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