• Skip to main content
  • Skip to primary sidebar

Ask Liz Weston

Get smart with your money

  • About
  • Liz’s Books
  • Speaking
  • Disclosure
  • Contact

beneficiaries

Q&A: Credit card debt doesn’t disappear when you die

April 14, 2025 By Liz Weston Leave a Comment

Dear Liz: I am an 80-year-old female in generally good health. My only family is my unmarried 54-year-old son. The only debt I have is credit card debt of about $30,000 at 0% interest. It’s in my name alone. My house and car have been registered with “transfer on death” designations. My son’s name is on my modest checking account. When I die, is there a legal situation where he would be required to pay the credit card debt? There will be no probate.

Answer: Credit card debt doesn’t just disappear when you die. The debt would become the responsibility of your estate. Transfer-on-death options avoid probate, the court process that otherwise follows death, but creditors can still go after the property that’s been transferred.

Depending on state law, creditors may have longer to make their claims than if your estate had gone through probate or if you had used a living trust, says Jennifer Sawday, an estate planning attorney in Long Beach.

That’s among the reasons why transfer-on-death designations may not be the best solution. Consider making an appointment with an estate planning attorney to discuss your situation and possible alternatives.

Also, your 0% interest rate is temporary. Once the current teaser rate ends, you’ll likely pay a much higher interest rate and your monthly payments could jump. If you can pay off this debt, that’s probably the best course. If you can’t, you may want to discuss your situation with a bankruptcy attorney.

Filed Under: Credit & Debt, Estate planning, Q&A Tagged With: beneficiaries, credit card debt, Estate Planning, investment account beneficiaries, transfer on death, transfer on death deeds

Q&A: The ins and outs of what counts for probate

April 1, 2024 By Liz Weston

Dear Liz: The value of our car, furniture and personal items is well below the $185,000 that currently triggers probate in California. We no longer own real estate. Am I correct that investment and bank accounts that have designated beneficiaries do not count toward the probate limit?

Answer: Yes. (Your car doesn’t count either, by the way.)

Most states have simplified procedures for smaller estates. California’s limit, which is raised with inflation every three years, was set at $184,500 on April 1, 2022. What’s counted for probate purposes depends on state law, and California excludes cars, boats and mobile homes, as well as bank accounts owned by multiple people, property that transfers directly to a spouse and real estate outside California.

Other property that avoids probate includes life insurance proceeds, death benefits and accounts that have named beneficiaries. Real estate can avoid probate if it’s held in joint tenancy or is transferred using a transfer-on-death deed. Property in a living trust also avoids probate.

Filed Under: Estate planning, Inheritance, Investing, Legal Matters, Q&A Tagged With: beneficiaries, Estate Planning, Probate, probate avoidance, simplified probate, transfer on death deeds

Primary Sidebar

Search

Copyright © 2025 · Ask Liz Weston 2.0 On Genesis Framework · WordPress · Log in