Long Island estate planning attorneys assist you in protecting assets so you can leave your money and property to your loved ones. It is important that you make plans to secure your legacy and this means taking steps to build wealth during your lifetime and to keep your acquired wealth safe at the end of life and after you pass on.
Unfortunately, many people are not able to leave their desired legacy because they pass away with a substantial amount of debt. If you die with debts, you may not be able to leave as much money and property to your loved ones as you had hoped to or you could end up with all of your estate going to try to repay creditors.
You should talk with Long Island estate planning attorneys at Mark S. Eghrari & Associates PLLC to help you make a financial plan so you don’t pass away with debts. Our firm can also explore the options available to you for protecting wealth from creditors. Give us a call today to find out more about the help that we can provide.
What Happens if You Die in Debt?
Americans are dying with an average of $62,000 in debt, according to Fox Business. As many as 73% of all consumers still owed money when they passed away, according to data from Experian. Those who owed money had an average total balance of $61,554 in outstanding mortgage debt. When considering only non-mortgage debt, those who died in debt had an average balance of $12,875.
When someone passes away and owes money, creditors generally have the ability to make a claim against the deceased person’s estate. In other words, during the probate process, the creditors can ask the court to have the estate repay the money that is due. If the deceased had intended to leave money to loved ones but had outstanding bills to pay, the money that the deceased person had wanted to become his legacy will instead typically be used to repay the outstanding balances owed to creditors.
If there is not enough money in the estate to pay the debt, then survivors are generally not going to be obligated to pay what was owed. Surviving family members should not be tricked into believing that they have to pay off the debt of their parent, child, or other relative who passed away.
Surviving family members have no legal obligations to repay debts that were owed. However, there are exceptions if the debt belonged to both the deceased person and a surviving family member. This commonly happens when there are married couples with shared debt. Co-signing debt also makes a person responsible for repayment, even if the primary borrower passed away. This means, for example, that if you co-signed for your sister’s car loan and your sister passed away, you would still be responsible for repayment of the car loan.
Secured debt also must be repaid in order to keep the assets that are serving as collateral. In other words, if you want to keep a family home that has a mortgage in the name of the deceased, the mortgage does not just disappear because the deceased was the person responsible for paying it. If the home is going to be kept and there is not enough money to repay the outstanding mortgage balance, either heirs would take over the mortgage or a new mortgage would need to be obtained in the name of the new owner.
Getting Help from Long Island Estate Planning Attorneys
Many people die with debt because they weren’t able to save enough money to cover the costs of their retirement. Mark S. Eghrari & Associates PLLC can help you try to make certain this does not happen by helping you take advantage of IRAs and other accounts that provide tax breaks for retirement savings. Our legal team also helps you to plan ahead to get medical care costs covered if you get sick, since high medical bills are another key reason why people die with lots of debt.
Whatever your situation, Mark S. Eghrari & Associates PLLC can assist you in finding a way to try to protect your wealth. Protection of assets from creditors is also among the services our Long Island estate planning attorneys provide, so join us for a free seminar if you want to find out about tools you can use to keep assets safe.
If you’re concerned about the possibility that you might die with debt and you want to try to ensure you can pass the maximum amount of your wealth onto the people you love, give us a call at (631) 265-0599 or contact us online today for personalized advice.