If I die does the debt that I have get transferred to my parents?
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If I die does the debt that I have get transferred to my parents?
I’m trying to make sure that the debts I have don’t end up being my parents problem when I die. If my debt was to transfer, if I was to legally “divorce” my parents would the debt transfer to them?
Asked on February 19, 2011 under Bankruptcy Law, Alaska
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
I am sorry that you have to consider this situation if you are in any way ill. When you pass away you have assets and you have debts. Both of them become part of your estate unless they in some way pass outside the estate through what is known as beneficiary designations (such as life insurance policies) or "POD's" which stands for "payable on death." Certain joint accounts can be held that way. Now, once you pass away your estate is responsible for the debts you have incurred. That means that your estate must pay the debts. Sometimes estates are insolvent and they file for bankruptcy. Your parents will not be automatically responsible for your debts (I am assuming that you are not a minor here). May I suggest that you seek help from an estate planner if this weighs so heavily on your mind? Good luck to you.
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