Have you ever wondered what happens to your wealth after you pass away? It’s not an easy topic to broach, because let’s be honest - who likes thinking about their own mortality? In fact, only 40% of Americans have a will or an estate plan in place to guide what happens to their money when they die. This unfortunate reality often causes unnecessary stress and problems for family after you pass away.
Without a will or an estate plan in place, your wealth will likely enter probate - a lengthy legal process of dividing up your assets after you pass away. However, because this process is long and drawn out, it puts a significant amount of extra emotional stress on your surviving family members. Additionally, without an estate plan, your funds go wherever the state decides they go - which may or may not be to your preferred kin.
Still, estate planning is often mistaken for a long and confusing process. People aren’t ever fully sure what happens to their money (or their debts) when they pass away, and it can deter them from engaging in the estate planning process. We can clear up any confusion now - want to know what happens to your money when you die? Let’s dive right in!
When you die, your estate is responsible for your debts. In some cases, they may be passed on to a co-signor or next of kin. If you and your spouse are joint account holders, or you have a co-signer on a loan, they’re responsible for your debt when you pass away. However, if you were the sole owner of the account in question and you don’t have a co-signer, one of two things happen:
Tony Velasquez runs Wisely Advised, LLC a full-service Registered Investment Advisory Firm offering comprehensive financial planning and investment advisory services to individuals, families, and businesses.
Whether it's traveling, being at the beach, or at his family's ranch in Texas, Tony loves enjoying time with his family and friends.