Your estate generally owes any of your debts. Creditors will come before your heirs. The rest of your estate is then given to your heirs. Assets will be sold , including heirlooms to pay creditors before heirs.
Your debt belongs to you and you alone; it is not passed on to your family members when you die. The laws regarding debt after death are defined at a state level, so there's really no umbrella answer for everyone. By cosigning, both parties assume full responsibility for the loan.
Under Community Property states, debts incurred during the marriage are owed by both spouses.
Life Insurance Proceeds pass to a named beneficiary, and are not considered part of your Estate. This money cannot and will not be used to pay your debts after your death.
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