Having a will – and life insurance – are two ways to protect your family from being burdened with your debt.
They say the best thing you can get rid of is your debt. But what happens to it if you pass away before paying it off? If you thought it would just disappear, you’d be wrong. Fortunately, having a will as well as life insurance can help you pay it off more efficiently without having to burden your loved ones.
Your Debts Don’t Die With You
If you have a will, you can nominate an executor. This is the person who’ll be tasked with dividing up your estate according to your wishes after settling your debt. To be clear, they won’t take on the debt themselves. They’re just given the authority to manage your financial affairs. If you had to pass away without having enough money to pay your debt, the executor might have to sell your property to settle it. In this instance, once your debts are paid, there might be nothing left to distribute amongst your loved ones.
If you had to pass away while in debt without a will, this could be even more problematic for the people you care about. Before they could inherit anything, your estate would have to be wound up. Without a will, it could take years for the Master of the High Court to allocate an executor to handle your estate. This is why it’s always best to have a will.
When Debt Is Shared, You Could Burden Someone
Do you have a credit card that you share with your spouse? Has one of your parents guaranteed your home loan? When you have debt that is shared with another, it becomes the responsibility of both. Thus, if you had to pass away and your estate didn’t have enough money or assets to sell, your “debt partner” might be held accountable for all of it.
Where There’s A Will There’s A Way
Clearly, your debts don’t die with you – but there are things you can do to ensure it doesn’t become a burden to those you care about. Firstly, ensure you draw up a will and appoint someone you trust to be an executor. If you move fast, you can take advantage of National Wills Week, from the 11th to 15th of September.
National Wills Week is an annual initiative to create awareness amongst South Africans regarding the importance of having a will. By participating, you can ensure your estate is handled according to your wishes and that any debt is settled quickly. To find attorneys participating in National Wills Week in your area, visit the Law Society of South Africa (LSSA) online.
Life Insurance Can Assist With Debt
Another way to prevent debt from affecting your loved ones is to invest in a life insurance policy. In the event of your passing, it will pay out a lump sum to any beneficiaries of your choosing. This way, should you pass away while in debt, they can use this payout to settle it. You can then rest assured that any assets you’d have preferred your family inherit don’t end up being sold to pay off debts. In short, it’s a great way to get peace of mind.
