Tag Archives: assets

Who Pays Your Debts When You Die?

According to a U.S. News and World Report story out this week, most probably your unpaid bills will be subtracted from any inheritance you leave to your loved ones.

In 2013, more than 61% of senior households had an average of $40,900 in debt. And it’s likely that many will die with those debts unpaid.

If you don’t have any assets, your debts may die with you. However, if you have assets, your creditors may be able to collect what they’re owed from those assets and the amounts subtracted from what your heirs will inherit.

How debt is handled depends largely on the state in which you are living at the time of your death. Nine states are “community property” states. That means your spouse is responsible for any debt incurred during the marriage. In other states, a spouse is not responsible for bills that are solely in the other spouse’s name. And some types of assets, such as retirement accounts and life insurance payouts, usually can’t be claimed by creditors.

The story goes on to list six things to do if someone you love has debt when they die:

1) Consult a probate attorney.

2) Notify creditors of the death. Once this is done, those accounts are frozen.

3) Catalog your loved one’s assets.

4) Determine what your loved one owes. That will help determine what, if anything, needs to be sold to pay the debt.

5) Have beneficiaries file for assets that pass without probate.

6) File tax returns. Even after death, tax returns need to be filed on time.

For more information about estate planning and helpful hints on what to do when settling a loved one’s estates, check out our website www.diesmart.com.

Are your beneficiary designations up to date?

Do you have a bank account? What about a brokerage account or life insurance policy? Have you set up an annuity or a retirement plan?

You probably have a least one or two of these types of accounts. When you set them up, you were asked to name a beneficiary for each. At the time, the person you named was someone you wanted to receive these assets when you died. It might have been a spouse or significant other.

It’s been several years since you named that person. Have your circumstances changed? Are you now divorced or no longer involved with him or her? Have you remarried or had children you want to be sure are protected?

Most people name a beneficiary and then forget about it. They never go back and update the information provided so it reflects their current wishes. They figure it doesn’t matter because they have a current will that designates who should inherit what. However, it does matter. Whoever is named as a beneficiary receives that asset when you die, regardless of what it says in your will. So your ex-husband or former girlfriend may receive a large sum of money that you didn’t want them to have.

Don’t let this happen. Review your beneficiary designations whenever your circumstances change and be sure that your assets will go where you want them to when you die.

For more information about estate planning, go to our website www.diesmart.com.

Do you know what your digital assets are worth…and what happens to them when you die?

A 2013 estimate by McAfee found that the average person’s digital assets are worth $35,000. That may be in things such as airline miles, purchased media, online bank accounts, Bitcoins, domain names. Regardless of what they are in, their value can add up quickly.

As my attorney put it, “The digital world is today’s Wild West. There are no sheriffs and no predictable law.” Yet you have to find a way to protect these assets and to pass their worth on when you die.

A recent blog by Sharon Fisher gave some great examples of people who didn’t do anything and what happened when they were gone.

A son gave up about $2000 that resided in a PayPal account because his father hadn’t left a will granting him possession to those funds.

Michael Hamelin, a hacker who died in an accident had secured his family’s systems so well that even with the help of other hacker friends, his wife hasn’t be able to gain access to some of their files, including the only copies of digital photos they owned.

Peggy Bush, who we previously wrote about, was a Canadian widow who was told by Apple that she’d have to get a court order for the company to reveal the password to an iPad card game she and he husband linked to play.

In addition to policies of each company that has an online presence, laws vary by state. It’s a very complex situation.

Be sure you have a plan for how to deal with your digital assets. Check out our book, ACCESS DENIED: WHY PASSWORDS ARE AS IMPORTANT AS YOUR WILL, which will walk you thru the issues and help you to figure out what to do.