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Have you ever wondered what would happen to your debts if you passed away before paying them off? Will your loved ones be obligated to pay your debts or will they simply disappear? Every person’s debt landscape is different, and the best approach is to create a tailor-made estate planning strategy to make sure your debt does not come back to haunt your family after you are gone. Common questions about debt after death Many individuals do not have a clear picture of what happens to debt when they die, so you are not alone if you are confused. Even if your estate plan includes a power of attorney, lifetime trusts for your beneficiaries, and other robust planning tools, not taking into account your debt when designing your plan can cause your plans to unravel. Here are some common questions about debt: ● Does my debt disappear after I die? ● Will it need to be paid by my family? ● When might someone be liable for the debt? ● What can be done to protect my family against it? Different types of debt lead to different consequences Most people have a number of different types of debt, which complicates the anxiety of post-death debt even further. But if we examine the different types of debt, it becomes easier to detect what types of financial actions are needed to protect your family from trouble later on. Planning Tip: In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), assets and debts acquired during a marriage are owned between spouses. Keep that in mind with each of the following types of debt. ● Student loans: If there is enough money in your estate to pay off your student loans, your student loan collectors can make a claim against your estate. It is important to note that not all student loan companies collect on debt after death. Federal loans are generally discharged upon death, so you will not have to worry about those. But, any co-signers on your loans will still be held responsible for your student debt. For private student loans, you will need to look at the terms of the promissory note since some loans are discharged on death while others are not. ● Credit cards: Much like student loans, credit card companies can make a claim against the estate. Outstanding credit card debt is not transferred to family members with the exception of community property states or if you jointly held the credit card, say with a sibling or a spouse. ● Mortgages: Mortgage debt is a type of debt most likely t