Sooner or later, everyone dies. That sounds pretty morbid, but it’s a truth that we can’t yet escape. We can, however, control how we take care of our partners and loved ones after we’re gone. Debt is just one piece of the financial puzzle, but understanding it is key to solid estate planning. This quick guide can help you learn more about what happens to your debts after death and how it can impact the family you leave behind.

Types of Personal Debt

Having debt is not a moral failing. CNBC reveals that the average American adult carries around $105,056 in debt. Every age group incurs debt a little differently – Gen Xers have the highest average credit card debt, for instance. But our debts tend to fall into eight major categories:

• Home mortgages
• Auto loans
• Home equity lines of credit
• Student loans
• Credit cards
• Personal loans
• Outstanding medical bills
• Miscellaneous debt, such as gym memberships

You’ll notice that the first three categories are secured debt. Creditors lend money that’s secured by collateral – your home or vehicle, for example. If you default on these loans, lenders can take that collateral for repayment. Unsecured debt like credit cards and personal loans don’t have collateral.

Debts and the Probate Process

Wills typically go through a process known as probate. A probate court’s primary task is to verify that a person’s will is valid. Once that’s done, the next step is administering the will and distributing assets. Investopedia adds that an estate’s executor must first pay taxes and debts owed by the deceased. Creditors can submit their claims to the estate, but they must usually do this within one year of the person’s death.

If you die intestate, that means you either didn’t leave a will or the one you left was invalid. In those cases, state law dictates how to pay off outstanding debts and distribute assets after your death. Every state’s laws are different, and some assets may be exempt from credit claims – retirement plans and life insurance, for example. Insolvent estates don’t have enough money to pay creditor claims. Depending on the state and situation, these estates may not undergo the probate process.

An estate’s executor must follow state laws for paying off the deceased’s debts. As another CNBC piece explains, most states require payment of funeral expenses first. Taxes and medical bills are usually next, followed by secured and unsecured debts.

Your Family and Leftover Liabilities

If an estate is insolvent and can’t pay its debts, must surviving family members pay them? It depends on the types of leftover debt and the laws where you live. Creditors can come after co-signers or joint applicants for payment, but they can’t hit up surviving family for debts only in the deceased’s name. Community property states are an exception. They assign equal responsibility to both spouses for assets and debts obtained during their marriage.

Student loans tend to follow different rules, and the types of loans you have dictate what happens to them after you die. The Balance mentions that federal student loans are discharged upon death. Private loans may follow the same rules as other unsecured debt, so creditors can make claims against your estate. Some larger private lenders like Sallie Mae may discharge balances, but you should check your lending agreements to be certain. Unfortunately, spouses in community property states may be on the hook for paying private student loans.

Estate Planning, Debt, and Your Financial Future

Both death and debts can be pretty scary topics, but you needn’t feel anxious about either. Knowing how estate law and debts work is key to making a good financial plan for your family. Whether you’re married or not, knowing what you owe and how your estate will pay can help your loved ones avoid serious problems after you’re gone.