We have posted numerous times about how to create an estate plan so your assets are divided according to your wishes. However, few people consider the fact that not everyone leaves behind assets. So, what happens when a person leaves behind debt? Determining which bills one is required to pay following the death of a family member can be a difficult process, as laws concerning such matters are applied differently depending on the type of bill in question.

According to estate administration experts, surviving relatives of deceased individuals are not obligated to pay the individual's medical bills. If the person who passed away possessed a solvent estate, the bills are paid for using those funds. However, if the estate is insolvent and cannot completely fund the payment of the medical bills, hospitals may not attempt to collect owed money from the estate-holder's family members.

In Florida, the homestead law helps protect the deceased's home from creditors, so long as the property is in the deceased's name and was his or her primary place of residence. This means that creditors generally cannot force a sale in order to collect owed debts. Heirs must continue to make any recurring mortgage payments, however, if they wish to stay in the home.

Heirs must only pay a deceased person's credit card debt if they are listed on the account in question. Collectors may call and threaten legal action against the deceased's heirs, but as long as the deceased was the sole signer on the account, his or her heirs are not responsible for any outstanding debts.

Source: WBPF, "What Happens To Your Bills After Your Die?" Cathleen O'Toole, Oct. 19, 2011