In many instances, credit card debt does not die with an individual, but unless an account was opened jointly, a surviving friend or relative will not have to pay off the debt in most cases. During the estate administration, it is an executor’s responsibility to pay debts with the deceased person’s assets. If there are not enough assets to cover all the debt, creditors cannot typically hold relatives liable for the outstanding balances. However, since California is a community property state, spouses might fall under one of the exceptions to that general debt liability rule.
When people pass away, their assets become the property of their estate, and this estate has to settle credit card and other debts before beneficiaries can collect their inheritance. If a will appoints an executor to handle distribution of assets, he or she must complete this process, but if there is no will, than the state will appoint an administrator to handle assets. If a spouse passes away and their partner lives in California but was not named on the credit card, he or she might be responsible for the debt if the estate cannot pay.
Credit card debts are not the only things family members might have to resolve. A child of the deceased who is at least 18 years of age could be responsible for unpaid bills regarding end-of-life care. However, these filial responsibility laws are rarely enforced. Spouses generally face more liability. Some states require spouses who have lost their husbands and wives to pay debts such as medical bills but not credit cards.
Probate can be a long complicated process when a person dies without leaving a will. An attorney could assist with estate planning before people pass away to ensure that their wishes are carried out after death and ease the burden on surviving family members.
Source: The Motley Fool, “What Happens to Credit Card Debt When Someone Dies“, Peter Andrew, July 19, 2014