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Debt and the deceased: How should spouses and heirs proceed?

It's a worrisome question for everyone

If your loved one died leaving significant debt behind, would you know what to do?

It's a worrisome question for everyone. Young or old, based on particular debt circumstances or geographic location, death with debt can provide significant problems for surviving family members. Depending on state law and the specific credit relationships involved, they might be shocked to learn that they could be legally liable for a deceased relative's outstanding debt – anything from unpaid mortgage balances and medical debt to unpaid credit card balances.

Spouses (http://www.practicalmoneyskills.com/unexpecteddeath) who may share any kind of debt jointly, particularly credit cards in dual name, could face greater challenges. It also may spell problems for co-signers of any kind of loan.

As with all financial planning, the best time to act is before an issue arises. Watching any family deal with extensive debt problems after a spouse or relative passes on illustrates the need for financial transparency while all parties are alive. No matter how difficult a family member's credit circumstances are, spouses and adult children should face those circumstances while options are available to deal with any problems.

Spouses can begin by requesting and sharing their three free annual credit reports (https://www.annualcreditreport.com/index.action) from TransUnion, Experian and Equifax to confirm debt status. Once that information i

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