Money Talks, So Should You

Q&A: Does credit card debt transfer to your children after death?

Pamela Boyce
by Pamela Boyce, The Garrett Network

This question highlights one of the top reasons why you have credit in your name only. Yes, the children would have to pay the debt of a parent if they were a joint owner or co-owner of the credit account.

But let’s say that when they were a teenager, you placed them as an authorized signature on your Macy’s account. Is that joint ownership? No, they will have no liability or responsibility to pay on the account in the event of your death.

It is important to know this difference.

READ: Is my spouse responsible for debts I incur?

The second consideration is the financial strength of the estate left behind by the one who died. If there are sufficient financial resources to pay the debt, it will be paid from these sources. So the children may not have to pay the debt directly but they may feel the impact of the debt as the remainder of the estate is smaller for the family or beneficiaries.

If the estate does not have sufficient funds, the debt is not paid. This is one reason why it may be challenging to receive a credit card or a loan when you do not have the income or assets to pay back the amount borrowed.


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Pamela Boyce is the owner of BASE Financial Planning, LLC, a Fee-Only financial advisory firm in the Lansing, Michigan area. She holds a Master’s Degree in Family Economics and Resource Management from Michigan State University. She also completed the CERTIFIED FINANCIAL PLANNER™ certification education program.