Legal Question in Wills and Trusts in New York

Re: Credit card debt

When you die, your Estate is responsible for your debts, including credit cards. But what if you don't have an Estate? If you set things up so that your assets don't pass through a Will, there will be no need to open an estate. You can do this by owning assets jointly, using accounts that name a beneficiary directly, or by using a Trust. Because no formal Estate would be opened, creditors might not have any way to present a claim, and the debt would go uncollected.

Re: Credit card debt

Normally they are debts of the estate, unless you have provided for credit card life insurance to pay the balance on your death. The payment depends upon the size of your estate, ownership of assets (individual vs joint ownership) or assets in an irrevocable trust with other people as beneficiaries on your death. If you have a minimal estate or no assets, the debt is not payable by third parties and might be charged off by the card company. You might want to consider some lifetime planning for asset protection, but keep in mind that the transfer of assets to avoid creditor collection could be attacked by the creditor.

Re: Credit card debt

The estate is responsible for the debt.