Legal Question in Credit and Debt Law in Illinois
credit cards balances upon death
My mothers boyfriend is currently on hospice, has 4 credit cards with balances and left his profit sharing money and life insurance to her. Is she responsible for paying those bills when she gets that money or will they take the money first? Or will those balances be written off if she mails them the death certificate? They are not married and she is not an authorized user on the cards.
1 Answer from Attorneys
Re: credit cards balances upon death
Thank you for your question. The answer is that his ESTATE will be liable for the credit cards. However, such things as life estate and MAYBE the profit sharing plan are not considered part of the estate. Such assets like cash in the bank, securities, and hard assets (jewels, property, etc) are technically supposed to be liquidated to pay all outstanding debts at the time of death. There are strategies around this, of course, many of which involve how the estate plan is structured in the first place. For people with significant assets, sometimes even taking the estate bankrupt is a worthwhile endeavor. Please feel free to email me with any follow up questions; [email protected]
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