Debts After Death: What Happens to Your Finances When You Die?

People with considerable assets draw up a will to determine what happens to their properties after their death. A will lets you dictate the division of your properties and even give special instructions on the care of minor children in your family.

However, not everyone manages to finalize their will before passing. As such, their properties are distributed based on intestacy laws. Intestacy laws are complex, so it’s best for the surviving family to seek the help of an estate planning attorney.

Intestate succession laws vary per state, but the distribution of property and assets follows a general pattern. This means that every state has a default succession plan if a person dies without a will. This protocol ensures that their properties are distributed in an organized way, with as little dispute as possible.

The pattern of property distributed depends primarily on whether you’re married or not and if you have children.

If You’re Married

In some states, your surviving spouse inherits everything if you’re married but have no children. In other states, however, your spouse only gets about one-third to one-half of the estate. Then the rest of your properties go to your parents. If your parents are also deceased, your remaining assets will be divided among your siblings.

Similarly, if you’re married and have children, your spouse will get one-third to one-half of your properties. The remainder will be divided equally among your children.

Special rules apply to domestic partnerships. Check the laws in your location because not all states recognize domestic partnerships. If your state does recognize domestic partnerships, your surviving partner inherits your assets the same way a spouse does. If not, your estate will be divided among your relatives, with your parents being the priority.

If You’re Single

If you’re single and have no children, your parents will receive the whole estate if they’re both still alive. Otherwise, your assets will be divided fairly among your siblings, half-siblings (if any), and surviving parent (if one has already died).

On the other hand, if you have no living parents, siblings, and nephews and nieces at the time of your death, your estate will be split between the relatives on your mother’s side and on your father’s side.

Meanwhile, if you’re single and have children, they’ll inherit your estate in equal shares. If one of your children died before you but have surviving kids (i.e., your grandchildren), your child’s share will go to those children.

Your Debts After Death


Any debts you leave behind can eat up the assets you planned to leave to your family. Your debts will become part of your estate after you die. The executor of your estate will be responsible for paying off your debts using the assets you left. They’ll also distribute the remainder of your properties after your debts have been settled.

If you don’t have enough assets to cover your dues, the creditors can’t do anything about it. But some debts can be passed onto other people. The responsibility of any housing loan transfers to the person who inherits the property. Car loans, student loans, and credit card debts can be passed onto joint account holders or co-signers.

The best way to avoid such a confusing ordeal is to draw up a will early on. Otherwise, the surviving family can seek the legal counsel of an experienced estate planning attorney to help them

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