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Sunday, December 5, 2010

Dying with debt: a dirty little retirement secret

This article from USA Today discusses how many Americans are not able to pay off their debts before they die, and how many don't seem to be too worried about it. The article has some really interesting statistics and even some helpful tips for seniors to help them avoid the situation. Click here to read it.

One of the points made in the article is that if the senior dies with debt, it eventually becomes the children's burden. The article is careful to point out that this does not mean that the children pay the debts; it means that the debts are paid from the senior's estate, leaving less for the children to inherit.

1 comment:

  1. Hi Lynne,

    Great website. You have answered most of my questions for the most part but I am having difficulty finding answers to a particular situation.

    An Ontario case...

    My father passed away this year (2011), without a will. My parents own and operated a small commercial apartment building in joint tenancy. My mom lives in one of the aparments. From what I understand, this property is not considered part of the estate because it is a joint tenancy (or last man standing situation). Taking the commercial property out of the equation, the estate's assets become minimal or non-existant. Since dad had no other investments and minimal savings. What he did leave were credit card debts and lines of credit--mom did not co-sign any of these credit cards and has no borrowing or user privilages on these accounts. Some banks have responded by continuing to send her credit card invoices after receiving the death notice. There hasn't been an official estate per se, since all my dad had was the commercial property.

    What responsibility does my mom have to pay these debts?

    Mortgage is joint and it's in both their names, thus she's paying this.

    Line of credit is not joint.

    Credit cards are not joint.

    Thank you in advance,
    OntarioProperty Owner.

    ReplyDelete

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