West Covina attorney talks about how credit card debt is handled after death
As long as the deceased is the sole person responsible for the credit card, the credit card debt falls on the estate to be paid through assets after going through probate. The remainder of the assets are then distributed according to the deceased’s will or state law if no will was written.
If there is a co-signer on the credit card, however, responsibility for the debt falls to the co-signer–in addition to or in place of the estate. Fortunately, a second cardholder who is not a co-signer and merely an authorized user is not liable for the credit card debt. But due to community property laws, a spouse may still be held responsible for debt even if they are not a co-signer on the credit card.
Another thing to keep in mind is that not all assets go through probate. As CreditCard.com puts it…
Some items, such as IRAs, 401(k)s, brokerage accounts, and insurance, typically pass to whomever you’ve named as a beneficiary, which is one good reason to keep those designations up to date. In many cases, those assets aren’t considered part of the estate.
Since these assets don’t go through probate, the executor can’t use them to pay estate bills.
The loss of a loved one is hard enough without having to worry about debt. Make sure your loved ones finances and will are in order. Contact me or visit our West Covina office for a free consultation! David Lozano is dedicated to making things as easy as possible for you and your loved ones!