Can Your Kids Inherit Debt Surviving the death of a parent is a devastating experience. You go through the process of taking care of the funeral arrangements, the wake and the funeral itself—it’s draining already as it is. You know that the loss hasn’t really made itself a reality to you yet, and you know once you’re home, you’ll finally be able to start grieving. You’re ready to cry and feel when all of a sudden, you get a knock on your door or a sudden phone call. It’s not your family and it’s not your friend – it’s the debt collectors. Without proper financial planning and precaution, the scene above is what your kids will go through when you leave a pile of debt on your (literal) wake. So what are you going to do now?
For the Offspring Death is inevitable in the family. It could be the mother, the father – any breadwinner, so you have to ask, what happens then? Will your children pay off your remaining debt after you’ve died? Will your kids suffer their whole lives thinking that they have can’t enjoy life to its fullest, knowing they have debts waiting to be paid? The truth is, children don’t inherit their parents’ debt. However, your children are required to pay using their personal resources only when any of the two scenarios happen: They are your joint account holder. A co-signer of your loans. However, debt collectors would still require the debt to be paid through what is left of the deceased parent’s estate. All the property in their name will be seized until the debt is paid. If the house, the car, that vacation house in Bali is all in your name—your kids won’t be able to inherit any of those until the collectors have made their claim. When there are no assets left to collect, the rest of the debt will be dissolved. Chances are, if it’s less than $25000, the debt will eventually be liquefied.