In the majority of cases, a deceased person’s debts land in their estate for payment. If the amount of debt involved is substantial, however, it can be a shock for heirs to learn how much the size of the estate has been minimized due to debt payments. This is why more people are considering debt planning in the estate planning process.
When you’re planning ahead, you can reduce a lot of confusion that might otherwise arise when you pass away. Limiting any confusion for your loved ones can go a long way for their emotional state, especially since they’ll be grieving your loss. Here are a few tips to get the most out of debt planning when you incorporate it into your general estate planning:
- Be clear and honest about the situation. Get an annual credit report for yourself to see what’s out there. It’s not always easy to admit the truth, but you’re definitely one step ahead if you know what’s there. As an added benefit, this is a good opportunity to clear up any mistakes or debts that should have been removed from your credit report so they don’t impact your estate mistakenly.
- Get advice. If you want to know the best way to structure your estate planning, you need a qualified professional to answer your questions. Enlist the help of an estate planner with experience.
- Organize documents. If you keep all the debt-related documents together, it’s going to be much easier for your loved ones or Executor to review these details on your death so that anything outstanding can be paid promptly.
If you’ve got debts and you’re concerned about the impact on your estate, do some planning now. Contact us at [email protected].