Beware: credit card debt doesn't disappear when you die

Los Angeles Times - Apr 12th, 2025

The recent discussion by Liz Weston, a Certified Financial Planner, addresses two crucial financial concerns for seniors: estate planning and Social Security benefits. An elderly woman with significant credit card debt seeks advice on whether her son would inherit this debt upon her death. Weston clarifies that the debt doesn't disappear but becomes part of the estate's responsibility. She advises seeking professional estate planning advice and considering alternatives like living trusts to better protect assets from creditors. Additionally, she highlights the potential increase in interest rates on the existing debt and suggests consulting a bankruptcy attorney if repayment seems unmanageable.

The second issue tackled involves the complexities of Social Security spousal and survivor benefits. A reader points out a misunderstanding regarding spousal benefits, prompting Weston to elaborate on the distinctions between spousal and survivor benefits. She advises that spousal benefits are based on the higher earner's full retirement age benefit and are unaffected by delayed filing, unlike survivor benefits, which increase if the higher earner delays claiming. The importance of consulting experts to optimize benefit strategies and the possibility of suspending or withdrawing applications to adjust benefits is emphasized, underscoring the critical nature of informed financial planning for retirees.

Retirement Financial Planning Liz Weston Estate Planning Credit Card Debt Social Security Benefits

Story submitted by Fairstory

RATING

7.8

Fair Story

Consider it well-founded

The article provides a well-rounded and accurate discussion on the responsibilities of credit card debt after death and the nuances of Social Security benefits. It effectively communicates complex financial topics with clarity and relevance, making it a valuable resource for readers interested in personal finance and estate planning. While it excels in clarity and public interest, the article could benefit from a broader range of sources and more detailed transparency regarding the legal and financial frameworks it discusses. Overall, it serves as a practical guide for those seeking to understand the implications of debt and benefits on estate planning, encouraging readers to seek professional advice for personalized financial strategies.

Accuracy

The story is largely accurate in its depiction of credit card debt responsibility and Social Security benefits. It correctly states that credit card debt becomes the responsibility of the estate after death, as supported by general estate laws. The article also accurately explains the distinction between spousal and survivor benefits, noting that spousal benefits are not increased by delaying filing beyond full retirement age. However, survivor benefits do increase if the higher earner delays filing until age 70. The only potential area for further verification is the specifics of how state laws might extend creditors’ claims on transfer-on-death assets, as this can vary significantly by jurisdiction.

Balance

The article presents a balanced view on the issues of estate planning and Social Security benefits. It provides a clear explanation of the consequences of credit card debt after death and the differences between spousal and survivor benefits. While it offers advice on consulting with professionals such as estate planning and bankruptcy attorneys, it could have included more perspectives on alternative financial strategies or expert opinions to enhance the breadth of viewpoints.

Clarity

The article is clear and well-structured, making complex financial topics accessible to a general audience. It uses straightforward language and logical flow to explain the implications of credit card debt after death and the nuances of Social Security benefits. The tone is neutral and informative, which aids in comprehension. However, more detailed explanations of technical terms could further improve clarity.

Source quality

The article cites Jennifer Sawday, an estate planning attorney, adding credibility to its claims about estate planning. However, it lacks a broader range of sources or references to specific legal statutes or financial guidelines that could strengthen its authority. Including more diverse sources, such as financial advisors or legal experts, would improve the reliability and depth of the information provided.

Transparency

The article provides some context for its claims, particularly regarding the temporary nature of 0% credit card interest rates and the impact of delaying Social Security benefits. However, it does not delve deeply into the methodology or specific legal frameworks that underpin these claims. Greater transparency about the sources of these financial insights and any potential conflicts of interest, especially regarding financial planning advice, would enhance the article's transparency.