Does debt transfer after death?
All the assets and debt are included in an estate. If someone dies, the estate must be settled. By settled, I mean all assets need to be accounted for as well as all outstanding debt. Many times, if there is no life insurance to be counted as a part of the assets, there is a possibility that when real estate is involved and loans against that real estates are not paid off, there is a higher amount of debt than assets. That’s the time when the real estate must be sold off to help settle the estate. So, yes, debt can be transferred, but the physical assets can be sold to settled debt within an estate.
