Dear Advocate:

My mother has credit card debt. She is a widow. She has no estate, but there is a small amount of life insurance that we’re planning to use for funeral expenses and to do repairs to the house so we can put it up for sale. When she passes, are my brother and I responsible for her debt?

Best,
Indebted in Indian Wells

Dear Indebted in Indian Wells,

Actually, if your mother owns property, she does have an estate. If the credit card is in her name alone, her estate is responsible for the debt. As the estate goes through probate, the executor or administrator of the estate will make a determination of the assets and debts of the estate and pay off debts in the order that state law requires. If assets remain after that, they will be distributed to heirs according to her will or, if she doesn’t have a will, state law. However, you and your brother are not responsible for her debt. Also, you do not need to use the life insurance to pay debts if your mother names a beneficiary or beneficiaries for the policy and at least one of the people named, outlives her. In that case, the insurance proceeds would go straight to the beneficiaries, avoiding the probate process.

Remember – if your mother does not name a beneficiary on the insurance policy, the insurance proceeds may be included in her estate and could be used to pay her bills, including credit card debt.