I often get asked about what happens to a spouse’s debts when they pass away. The answer is always “it depends”. It depends on what types of debts are involved and how assets are owned. When a person passes away, if that person has debt that is in his or her name only, the creditor can make a claim against the estate.Normally, assets that are owned jointly go automatically to the surviving spouse and don’t pass through the estate. For example, if John and Sue jointly owned a house and that was their only asset, and John died with $5,000 in credit card debt in his name only, the credit card company is out of luck. The house passes automatically to Sue in most cases, and there are no assets against which the credit card company can make a claim.Any assets that have a beneficiary form (like life insurance or 401k’s) pass automatically to whomever is named on the forms, and creditors can’t make a claim against those assets. For example, if Jim owed $10,000 in medical expenses when he passed away, and his only asset when he passed away was a life insurance policy of $100,000 he left to Sally, the medical provider can’t come after the life insurance. That money is protected from the claims of creditors. If he left the policy payable to his estate, the medical providers could make a claim against that money.Any debts that are secured by an asset (like a mortgage or a car loan) don’t go away – they go with the asset to the person who inherits the property. Holders of unsecured debts, like credit cards or student loans, can go after any property left in the estate, but in many cases that isn’t much.