What happens to your debt after you die?

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If you are married in community of property and you die with debt, money from your estate will be used to settle a portion of it. But your spouse can be held responsible for the full amount if there is no money to settle the debt.
If you are married in community of property and you die with debt, money from your estate will be used to settle a portion of it. But your spouse can be held responsible for the full amount if there is no money to settle the debt.
Charles Hand / EyeEm / Getty

Your debt will follow you to the grave and can even leave your loved ones worse off, financially. This is why proper estate planning is critical for any adult.

While your liabilities include loans and other credit agreements, your assets include things such as life policies, property and vehicles. Your loved ones cannot inherit anything until all the debt in your deceased estate has been settled.

To find out how you can avoid a situation where your family has to wait for months or even years before your deceased estate can be wound up, we spoke to John Manyike, Head of Financial Education at Old Mutual. He explains what you need to do now to protect your loved one’s future when you have passed on.

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