The loss of a loved one is terribly painful. However, as if to add insult to injury, the family of the deceased will invariably begin getting calls about his debts--and demands that they be paid.
Considerations
The issue of debt after the passing of the debtor is complicated. Unfortunately, there are no set rules that universally apply to everyone in this situation.
Signed Accounts
If an account with debt is in the deceased's name only, only the deceased is legally responsible. This means that the debt cannot be passed on to the family members or heirs.
Estate
The debt is passed to the deceased's estate. If the estate--a representation of assets and property--cannot cover all the debts, creditors are notified that the estate is insolvent. They must write off the debt, without exception.
Community Property
Several states consider all assets accumulated during the marriage to be joint, or community, property and often debts are included. In this case, the spouse of the deceased is legally responsible for the debts. However, each state's laws regarding debt and community property are different.
Assets
Assets like a 401(k) or an IRA cannot be used to pay off credit card debts. They are federally protected and go to the named beneficiaries. Insurance passes outside the estate, so it can't be used to pay bills by the executor of the estate; however, some states still require it to be used to pay off debts.
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