Would I be responsible for the credit card debt of a parent upon their death?

My mother is terminally ill. My father has already passed. I have one brother with whom I will inherit a house with a small home equity loan, a small amount of acreage not associated with the house, a life insurance policy, and a retirement fund. The house deed is intended to transfer at time of death to my brother’s and my name. The acreage is also set up this way. Our names are already on the deeds. My mother has asked that we all sit down and decide exactly how to divide all the assets before her death. How would I protect from assuming her credit card debt?

Asked on November 10, 2011 under Estate Planning, Arkansas

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

I am so sorry for your loss and for the situation and it is with your Mother.  It sounds here as if you have done some estate planning already with the property involved.  Although this forum can be no substitution for sitting down with someone who can look at everything and give you advice.  What may work est is to create a trust to inherit the other assets - like the life insurance policy that will pass outside probate if there is proper designation in place - and the retirement fund.  It may save you in taxes and give you time to divide the assets after her death as the contingent beneficiaries of the property.  Her credit card debt is a debt of the estate and not any of you individually.  This can help to let you enjoy your mother while she remains with you and worry about the assets later.  Good luck.


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