Legal Question in Credit and Debt Law in Illinois
I am a widowed senior. I have accrued credit card debt which are only in my name. Are my
children required by law to pay them. There will be no probate. I also have a loan, only in
my name - only my car as collateral - are they required to pay it off ? My condo is in trust
to my 2 children, but I don't believe there is much equity left in it....should I take it out of
trust? I have life insurance left to them - can creditors touch that. Thank you -
2 Answers from Attorneys
When you die, your estate is required to settle your debts from estate assets.
The life insurance goes straight to beneficiaries. The house in trust if set up right will go straight to kids, however, the mortgage will still be attached. The car will pass, but again will pass with loan attached. Credit cards will be paid by estate if not enough in there to pay, then the debt will be forgiven. If a lot of credit card debt and not a lot of equity maybe file bankruptcy that way more money left in estate for your children.
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