Estate Attorney Explains What Happens to Debt When You Die

Рет қаралды 20,482

3 жыл бұрын

You can't take it with you, right? Debt just disappears when you die, and your family gets all your stuff, scott-free! Sadly, it doesn't work like that. Board Certified Tax & Estate Attorney John Strohmeyer is here to explain what really happens.
Your debt still exists, and your estate's assets can or will be used to pay them off. There are some immediate concessions for surviving spouses and family members before we get to the debts. Then there's a set hierarchy of which creditors get paid first, under what conditions, and in what proportion. It's a somewhat complicated set of rules, but John is here to make it simple and easy to understand.
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Strohmeyer Law is a law firm based in Houston, Texas, specializing in tax law, estate planning, and probate law.
Nothing in this video is specific legal advice for you. Watching or commenting on this video doesn't create an attorney-client relationship.
For more information, visit: www.strohmeyerlaw.com
Instagram: strohmeyerlawpllc

Пікірлер: 44

@robertbell525 6 ай бұрын

When people we've known pass, we just call the card issuer and they ask for a death certificate and it's done. Anything not secured, the lender is SOL.

@strohmeyerlawpllc 6 ай бұрын

Sometimes that does work! And if there are assets, the creditor may still demand to be paid.

@thesmartbudgetchannel2940 2 жыл бұрын

I don't have debt. Haven't had debt in over 14 years. Stay out of debt.

@acejensen2895 2 жыл бұрын

Yeah everyone just be rich don’t be stupid and be poor

@savannahsmiles1797 Жыл бұрын

covid WIPED out a lot of people...they had NO recourse so quit being holier than thou. They didn't ask for a pandemic, and many lots GENERATIONAL biz's, so kindly SHUT UP

@bite-sizedshorts9635 9 ай бұрын

@@acejensen2895 You don't have to be rich to pay off all your debts. Watch some Dave Ramsey videos. I am on social security and will be paying off my last credit card next month. The car will be a year or so down the road, and the house will be paid off in five years. If you don't make enough money at your job, volunteer for extra shifts or extra hours. Find part time jobs or do online computer work. I worked online doing genealogy for wealthier people to make a safety cushion. If I can do it, almost anyone can.

@Dumbluck14 2 жыл бұрын

My sister when my mom died called all her debtors and made arrangements to pay them off. She didn’t owe much but one credit card company said “Why do you want to pay this off if she is dead?”

@bite-sizedshorts9635 9 ай бұрын

That's because you don't have to pay credit cards as there was no collateral.

@bite-sizedshorts9635 9 ай бұрын

At least in NC, if you have no assets at all, other than the house you live in, the credit card companies are screwed. There is nothing for them to take. In NC the house title, at the moment of death, goes to the heirs and is not part of the estate. The credit cards are signature loans with zero collateral. So again, the credit card companies are screwed. Of course, they don't take it well and will try to collect anyway and eventually sell the accounts to collection agencies, who will then call the heirs and swear at them if they won't pay. I had this happen with my mother. There was so little money in the bank, I had to chip in to pay for the legal notice in the local paper. The house went to my siblings and me. The credit cards were never paid. And this was over a dozen years ago.

@strohmeyerlawpllc 9 ай бұрын

Yes, most states have protections for the homestead in some version. In Texas, it's not protected from creditors if the beneficiaries or heirs are someone other than the surviving spouse or minor children.

@mjMiller212121 2 жыл бұрын

Is student loan debt treated the same as other debt? Which gets paid first, a credit card or student loan during settlement? Will the beneficiaries be responsible for excess student loan debt once the estate assests are gone?

@strohmeyerlawpllc 2 жыл бұрын

As unsecured debts, Texas law provides that they get paid last. Some student debts are discharged on death, but I don't know of a one-size-fits-all rule. Debts of the deceased aren't passed on to beneficiaries *unless* they've taken assets of the estate that should have been used to pay debts.

@pinkfreud62 7 ай бұрын

No dependents here & I'm almost 61, lol.

@odium3691 2 жыл бұрын

Can an old guy max out credit cards and HELOCs and buy like gold and such to hide. And then the beneficiaries can come back and get that value later? I know they would have to claim it on taxes and such. But I imagine no one is paying close enough attention to spot 1 or 2 gold coins being sold a year. Or what about bitcoin? He can buy buy buy and then transfer. There is no way of getting to the other bit wallet without intimidation or literal torture. If they could find the other person at all. Now claiming that coin on taxes is hard. But you can go through an exchange that doesn't report to the IRS. So long as you don't get too extravagant, is there a way to get busted? That's not even considering ways to launder the money or bit. Not advocating for anything illegal of course. Just for educational purposes only. Of course.

@strohmeyerlawpllc 2 жыл бұрын

While you *could* do this, what you're suggesting starts crossing the line into causing problems with the IRS. Anything that comes under the heading of "we're fine if they don't find out" isn't a good plan, and I don't recommend. As taxpayers, we're obligated to report all transactions, so by not reporting all transactions, it's creating a bad situation with them where the returns aren't accurate. Taking the "they won't find me" risk (also known as "playing the audit lottery") isn't a good strategy and one that I can't recommend. Beyond potential IRS issues, when it comes to probate and transferring assets, those credit cards and HELOCs will need to be paid back. They don't just go away when you pass. Whomever inherits the assets will need to resolve the debts, otherwise those assets could be used to pay off the debts. So, someone could do this, but it generally creates a mess for someone else. Check with your advisors before proceeding.

@savannahsmiles1797 Жыл бұрын

why not ...everything the gov did to us during COVID was illegal

@joebush5463 2 жыл бұрын

first get everything out of my name vacations gambling have fun i am dead cant get anything out of me now

@xslabcabxhearsex 2 жыл бұрын

I’m in my 50”s and single and have no kids.both parents have passed and have no family left,just myself. I plan on making a Will soon but not sure how to go about it.i adopt rescue dogs and would like to leave everything to the rescue I get my dogs from.my house is mostly paid off but what would happen with that debt if I die?Would like the recur to sell the house and keep the profit after paying the debt off.is this possible. Any advice would be greatly appreciated

@strohmeyerlawpllc 2 жыл бұрын

When you draft your Last Will, you can include directions that benefit the rescue. As part of the estate administration, the debts will need to be paid off. You should talk about your specific circumstances with an advisor who's dealt with this before to ensure that you get your best answer!

@MENSA.lady2 7 ай бұрын

usually when you die your debts die with you. How can a creditor sue a corpse. ? That said there are Joint and Several deals where others may be liable to your share.

@strohmeyerlawpllc 7 ай бұрын

Debts don’t necessarily “die with you.” Your remaining assets are available to satisfy those debts. One of the responsibilities of the executor/administrator of the estate is to resolve any remaining debts before making distributions to estate beneficiaries/heirs. If those debts are not satisfied before debts are resolved, then the creditors can seek repayment from the beneficiaries who received the estate’s assets.

@VenessaDiocothle Жыл бұрын

Sir I received inheritance from a deceased US national that apparently owed a huge sum of tax. I am an African and The IRS consultants and treasury told me via email to pay 26% of the tax payable by the deceased, but later told me that they will take all my money and I will still owe them the remaining money. Then later they told me to pay them $10,000 from my pockets to receive my CVN code otherwise they will take me to court. Is this all true since the IRS does not have an email address, and where can I get my CVN code from so that I can transfer my money from my online bank account to my local bank account? Can you please give me advice sir? ASAP if possible?

@strohmeyerlawpllc Жыл бұрын

I'm sorry to hear this, but this sounds very suspect. It's possible the deceased owed taxes. You'll need to get your own lawyer to assist you with resolving any conflicts with the IRS.

@VenessaDiocothle Жыл бұрын

@@strohmeyerlawpllc thanks for responding

@strohmeyerlawpllc Жыл бұрын

@@VenessaDiocothle Of course! And best of luck as you get this resolved.

@niloebrahimi3527 2 жыл бұрын

Thank you so much for your video, My husband 10 years back , I was about to refinance the house we were leaving. Before closing day , i didn’t know that my husband took equity from the house to make another house which that investment didn’t go good and he got bankruptcy chapter 7. I worked so hard and I tried to remove I couldn’t Could you help me ?

@strohmeyerlawpllc 2 жыл бұрын

I'm sorry to hear that. Please call our new client hotline and we'll see if we're able to help. I can't give any specific advice or recommendations here.

@frankish5314 6 ай бұрын

30 States have filial laws on their books. Unlikely but such a State Could go after adult children to pay for their impoverished Parent's nursing home care!

@strohmeyerlawpllc 6 ай бұрын

I agree that it’s unlikely. Genre the only way that creditors can go after beneficiaries of an estate is if they take assets from the estate without paying the debts first.

@frankish5314 6 ай бұрын

Lets just say my MIL is staying in Colorado (no Filial law) and we live in Oregon (has filial law) I am very happy with that arrangement!..:)@@strohmeyerlawpllc

@johnkulus7812 5 ай бұрын

They just accumulate interest

@strohmeyerlawpllc 5 ай бұрын

All the more reason to get them resolved.

@johngmulhatton9794 8 ай бұрын

Submit all claims against the Estate should be sent to the ANC Govt. Like all the others who are still alive, those debts should be written off as you are dead. You made them not your spouse/partner or family.

@strohmeyerlawpllc 8 ай бұрын

The claims can only be satisfied from the decedent’s assets. Spouses and family members are generally not subject to the debts unless they either are responsible for the debt (signed for the mortgage) or they accept assets of the estate without resolving the debts.