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Listerhill Credit Union is a nonprofit financial cooperative improving lives in our community.

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What Will Happen to My Loved One’s Finances After they Pass Away?

Although no one likes thinking about it, you may wonder what happens to your loved one's finances after they die.

No one likes to think about what will happen to their loved ones finances after they pass away, but it’s best to plan in advance to avoid frustration and financial loss during an already difficult time. Here’s what you need to know about what happens to someone's financial accounts, debts and more when they die.

What happens to financial accounts upon the account holder’s death?

This depends on whether or not there is a named beneficiary. An account with a named beneficiary is also known as a Payable On Death, or a POD, account.

If the account is a POD account, the beneficiary can collect the funds in the account when the account holder dies. There’s no need to drag things to court. Just show your photo ID and your relative’s death certificate to the financial institution, and they should assist you.

If there is no named beneficiary, the financial institution will release the funds in the account to the executor of the estate, who will distribute it according to the deceased’s will. If there is no will, the funds will be distributed according to state law.

It’s always a good idea to write up a living trust, establish a power of attorney and draft a medical directive before any of these are needed.

What happens to credit card debt after the card holder dies?

You probably won’t get stuck paying off your relative’s credit card debt; however, there are some exceptions. A family member might be accountable for such debts if:

∙ They have co-signed for deceased’s credit card.

∙ The debt is connected to a jointly owned property or a business.

∙ They live in one of nine community property states.

How are credit cards and other debts paid after the debtor’s death?

Here’s where probate comes in. Probate is the legal process of paying off the debts and distributing the assets of a deceased person. A probate court will determine exactly how this is done.

If the deceased left a will, the probate court will oversee and legalize the transfer of assets through an appointed executor.

If the deceased has left a living trust, the assets will automatically pass on to the beneficiaries without the need for an executor, or for lengthy court appearances and expensive attorney fees.

The beneficiaries of the deceased’s estate will not be allowed to take ownership of any assets if the deceased has outstanding debts. The creditor will need to submit a claim for the assets before a state-imposed deadline. If they have done so, and there is enough money or assets to cover the debt, it must be paid.

Thankfully, there are some assets that are off-limits to creditors, including life insurance policies, retirement accounts, and POD accounts.

What happens to your loved one's finances after they pass may be confusing and difficult to manage. Although there may be a lot to navigate, there are many resources that can help you through the process, such as Legal Zoom.

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Frequently Asked Questions

  • What if I prefer to make my payments through a pre-authorized automatic payment arrangement (ACH)?

    Please contact TruHome at 844-203-3642 to set up automatic payments or visit here to set them up yourself.

  • What if I prefer to make my payments through the Listerhill Mobile Banking app or Online Banking?

    Unfortunately, when the transfer occurs, mortgages will not be displayed on our app or in online banking, but we are working to bring that functionality ASAP.

    In the meantime, please visit here to view all mortgage information and payment options.

  • What if I prefer to make my payments through the "Pay Your Loan" link on the Listerhill website?

    Unfortunately, after the transfer you will not be able to use this link to pay your mortgage. However, you can visit here to view all mortgage information and payment options.

  • What if I prefer to make my payments over the phone?

    You can reach TruHome's payment center by calling 844-203-3642.

  • What if I prefer to make my payments by mail or through Bill Pay at another financial institution?

    As a national servicing company, TruHome will probably be in your other financial institution's list of payees who accept electronic payments. If not, you can set up the account using the address below:

    TruHome Solutions, LLC

    P.O. Box 219958

    Kansas City, MO 64121-9958