Who Takes On Your Parent’s Debt?

The Globe and Mail’s Preet Banerjee discussed last week in an online article the concept of who is responsible for our parent’s debt when they pass on, a subject that creates a good deal of anxiety for many Canadians when they see their mother or father struggling with mounting obligations. “Some people can expect big inheritances when their parents pass away. But when the talk of the town is the record levels of debt Canadians are holding, not to mention how many people are expecting to enter retirement owing money on their mortgages, lines of credit, and credit cards, I’ve been hearing this question more and more: “Am I responsible for my parents’ debts?” Banerjee wrote. He continued, “With longer life expectancies, portfolios that have been beaten down by the recent global economic carnage, and projections for steep increases in healthcare costs, it’s not a stretch to imagine senior citizens with debts that they may never be able to pay off. What if dear old dad has $50,000 in credit card debt when he meets his maker? Can he leave that to his children?” “In general, you cannot inherit debt unless you have previously accepted responsibility for it.” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS

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