In California and without proper estate planning, your credit card debts, mortgages and other obligations may pass on to either your spouse or to your heirs. Because spouses own property and assets equally under the Golden State’s community property laws, jointly held debts may become the responsibility of your significant other.

If your spouse has predeceased you, the probate process may require your estate to pay your remaining creditors before money and property transfer to your designated heirs. The executor of your estate typically pays your administrative and legal fees and your outstanding debts, and then your heirs generally receive their distribution from the remainder of the portion.

Creditor’s rights against your estate

A creditor must submit a claim by a certain deadline, and your executor must then use any funds available in your estate to pay it, as noted by U.S. News & World Report. An estate’s assets may first pay financial obligations that required collateral, and your estate may pay off the remaining balance of your mortgage followed by other secured obligations such as an auto or a business loan. After paying the secured creditors, any remaining money or assets may go toward paying unsecured debts such as credit cards or personal consumer loans.

Authorized users and co-signers

Under certain circumstances, an heir named as an authorized user on your credit cards may have to pay the remaining balance that he or she charged. If you co-signed on a loan for your heir, he or she is generally liable to pay off the outstanding balance.

The information provided is for educational purposes only and not intended as legal advice.