Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent Benji Carr

UPDATED: Jun 28, 2022

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The Facts of Life

  • The deceased individual’s estate will be responsible for the debt
  • Most family members won’t have to pay for leftover debt
  • Some exclusions apply, such as with spouses in certain states

Are beneficiaries responsible for debts left by the deceased? It may depend on whether or not you signed any agreements before that person’s death.

If not, you won’t have to pay for any deceased individual’s debt out of pocket. Advanced planning with life insurance can help ensure you leave something behind for your loved ones.

If you’re researching debts after death with no estate, enter your ZIP code into our free quote tool to get an idea of what you could pay to leave them some financial support.

Are beneficiaries responsible for debts left by the deceased?

According to the Federal Trade Commission, during the probate process, the deceased individual’s estate will first be responsible for any debt. After that, it will likely fall to the next of kin to pay all the outstanding debts from that person’s estate. As a result, the beneficiary of an estate’s assets often won’t have to draw from their finances to pay any debts.

There are a few exclusions to this rule, including:

  • Co-signed an agreement they were paying on
  • Spouses in certain states
  • Legally responsible for resolving an estate that’s violated probate laws

In these cases, you may be found responsible for paying the debts out of your pocket. On the other hand, if none of these circumstances apply to you, the debt will likely go unpaid if the estate cannot pay the total amount.

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What happens to your debt when you die?

What happens to debt when you die? If you die owing a debt, such as federal taxes, hospital bills or nursing home expenses, the person you have named as your executor will be responsible for ensuring these are paid from your estate.

That person will pay using the money remaining in your estate. Most relatives won’t be responsible for paying that person’s debt when they die. However, more than half of US states have laws in place that may require your children to pay bills related to any end of life or long term care expenses.

What happens if you die with debt?

If you don’t have the money in your estate to pay for your debt, you’ll have that much less to leave to your loved ones. Any money you had to your name will likely go to paying for any debts still sitting on your account.

Can you inherit debt from a deceased relative?

Most of the time, relatives won’t be responsible for paying out of pocket for the deceased relative’s debt. This isn’t always the case, though, and in some cases, the debt can transfer. The situations in which one might inherit debt include:

  • Co-signed on a loan
  • Joint account holder on credit card
  • State laws for spouses
  • State law regarding jointly owned property

If you inherit the dead person’s debt, you’ll likely receive some notice before you’re expected to start paying. In most of these cases, you’d have had to sign a document in which you already know you bear some of the responsibility.

What debts are forgiven at death?

Most debts aren’t forgiven as much as they go unpaid. With the money left in your estate, your financial administrator will pay out money toward unpaid bills to cover whatever debts they can. It should be noted that funeral expenses are normally the first thing to be covered from a deceased’s estate. 

If there are any finances leftover, those can be passed down as inheritance or for whatever other reason the executor wants.

Who has to pay for a deceased person’s debts?

In short, the deceased person is the only one responsible for their debts. When someone dies, they are still accountable for their debts. However, because they can no longer pay on those debts, the executor will use the remaining value of their estate to pay off those bills.

If you’re a spouse, the lenders may hold you partially responsible for some debts, depending on the state you live in.

While your loved ones won’t be held financially responsible for your debts, you likely won’t be able to leave anything behind if all your money goes to your old bills. Getting a policy with the best life insurance companies can help ensure you leave an inheritance behind for your loved ones.

Beneficiaries and Unpaid Debts: The Bottom Line

If you’ve recently lost someone close, you may be worried about inheriting their debt after their death. However, unless you’re legally responsible via a previous agreement, you likely won’t have to take on that person’s debts. That being said, you’ll leave less to your loved ones with debt.

Now that you know more about researching debt inheritance, enter your ZIP code into our free quote tool to get an idea of what you could pay to leave your loved ones a financial inheritance.