What Happens to Your Debt When You Die and How to Protect Your Family

One of the questions I hear most often is: What happens to my debt when I die? Or, just as often: What happens to my parent’s debt?

The answer is: it depends. And whether that answer causes stress for your family - or peace of mind - comes down to planning.

Debt doesn’t magically disappear when someone dies. Outstanding debts are generally paid from the deceased person’s estate, or by anyone who is legally responsible for them, such as a co-signer. That’s why your estate plan shouldn’t just focus on what you own. It must also account for what you owe.

How Debt Is Handled After Death

When someone dies, an executor (or personal representative) is responsible for wrapping up their financial affairs. If probate is required, creditors are given a specific window of time to file claims against the estate. Valid debts are paid before any inheritance is distributed.

Assets that pass outside of probate, like life insurance, retirement accounts, and accounts with beneficiary designations, typically go directly to beneficiaries and are not part of the probate estate. That means beneficiaries may receive less from the estate if debts are high, but protected assets may still pass intact.

If the estate doesn’t have enough assets to pay unsecured debts, such as credit cards, those debts are often written off. However, secured debts (like mortgages or car loans) are handled first, and state laws can affect the outcome.

When Family Members Are Responsible

Most of the time, your family does not inherit your debt. But there are key exceptions:

• If someone co-signed a loan or credit card

• If assets or accounts were jointly owned

• If you live in a community property state

• If state law assigns responsibility for certain medical expenses

This is where assumptions get people into trouble.

Why Planning Matters—Even If You Have More Debt Than Assets

Avoiding probate through tools like a revocable living trust can create more flexibility, reduce court involvement, and allow your loved ones to negotiate with creditors more effectively. Planning ahead gives your family options instead of forcing them into damage control.

Good estate planning isn’t about avoiding responsibility; it’s about preventing unnecessary harm.

We Can Help

Ready to get your own affairs in order? Start by booking a Peace of Mind Planning Session. We will answer your questions, go over your options, and discuss our unique flat-fee pricing. Mention this article and we’ll waive the $450 session fee!

Who Will Take Care of You as You Age? Why Planning Ahead Matters

Many people assume that when they need help later in life, a spouse, child, or close friend will step in. But that assumption is becoming increasingly risky. Today, more than 16 million Americans over age 65 live alone, and most have no formal plan for long-term care or decision-making support as they age.

Longer lifespans, higher divorce rates, and families spread across the country mean more people are aging without a built-in support system. Even when adult children live nearby, busy schedules, financial pressures, and emotional stress often make caregiving far more complicated than expected.

The Risks of Aging Without a Plan

Living alone as you age isn’t just about loneliness -  it’s about safety, autonomy, and dignity. Health emergencies, cognitive decline, or mobility challenges can arise suddenly. Without clear legal and care instructions, decisions are often made in crisis.Many families discover too late that they never discussed critical questions, such as:Who should make medical decisions if I can’t?Do I want to age at home, move to assisted living, or consider memory care?What treatments do I want - or not want - at the end of life?Without written guidance, loved ones are forced to guess. Disagreements can arise, relationships can fracture, and outcomes often don’t reflect what the person would have chosen for themselves.

Why Old Estate Plans Often Fail

Even people who have estate planning documents may still be unprotected. Laws change. Assets change. Relationships change. A plan created years ago may no longer align with your wishes, or even work when needed.Outdated documents can leave gaps in authority, create confusion, or require court involvement just when your family is under the most stress.

How Comprehensive Estate Planning Protects You

A modern estate plan does more than distribute assets. It creates a clear roadmap for care, decision-making, and financial protection if you become incapacitated. A well-designed plan can:

• Clearly name decision-makers and alternates

• Document your care and medical preferences

• Reduce family conflict and uncertainty

• Protect your independence and personal wishes

• Ensure assets are properly managed and preserved

Plan Now for Peace of Mind Later

Aging is inevitable. Chaos is not.By planning ahead, you protect yourself, preserve your autonomy, and give your loved ones clarity when they need it most. Thoughtful estate planning isn’t about fear — it’s about control, confidence, and peace of mind.

We Can Help

Ready to get your own affairs in order? Start by booking a Peace of Mind Planning Session. We will answer your questions, go over your options, and discuss our unique flat-fee pricing. Mention this article and we’ll waive the $450 session fee! BOOK HERE https://calendly.com/marissapetilloestateplanning/peaceofmindplanningsession

Can AI Really Draft Your Estate Plan? What Families Need to Know

Artificial intelligence (AI) has made huge strides in the past few years, bringing futuristic technology into our everyday lives. Tools like ChatGPT can already write emails, brainstorm marketing ideas, answer questions, and even help with educational programs. It’s natural to wonder: could AI eventually replace the work of estate planning attorneys? And more importantly, is it safe to trust a computer with something as important as your family’s future?

We decided to put AI to the test by asking ChatGPT to create a trust. What we found might surprise you.

What Is ChatGPT, Really?

ChatGPT is a powerful language tool created by OpenAI. It’s trained on an enormous amount of human-written content - books, articles, websites, stories - and uses all of that information to generate answers that feel very human. You can ask it to:

• Write emails or articles

• Answer questions

• Create lists, poems, or even songs

It’s incredibly fast and can sound surprisingly sophisticated. But like any tool trained on the internet, it can be wrong, inconsistent, biased, or even a little silly. ChatGPT is impressive, but it still needs human supervision.

How People Use ChatGPT

Because ChatGPT works like a conversation, you tell it exactly what you want. You can say things like “summarize,” “rewrite,” “create a top-five list,” or “make the tone more friendly.” You can give it context, ask follow-up questions, or set boundaries such as wanting a professional tone or a short answer.

The Real Question: Can ChatGPT Draft a Trust?

We tested it by asking the program to create a trust-based estate plan - something that requires careful thought, legal knowledge, and the ability to anticipate future complications. Here’s what we discovered:

ChatGPT missed major legal requirements. It left out essential provisions about what happens if the trust maker, trustee, or beneficiary becomes incapacitated.

It included language that could cause tax problems. One clause it generated could actually waste a family’s estate tax exemption—something no responsible attorney would ever allow.

It didn’t understand nuance. State laws, family dynamics, asset types, long-term planning strategies - AI simply can’t personalize these the way a trained professional can.

Bottom Line 

AI can assist, but it can’t replace real planning. If you are ready to get started on your own estate plan, start by booking a Peace of Mind Planning Session. We’ll answer your questions, go over your options and our flat fees, and decide if we want to move forward. Mention this blog and we’ll waive the $450 session fee!

Estate Planning for Military Families: What You Need to Know

Military families live with realities most civilians never have to think about - sudden deployments, frequent moves, unpredictable schedules, and the everyday risks that come with serving our country. Those constant changes make protecting your family especially important, and often a simple, one-page will isn’t enough to cover everything your family may need. Here’s what every military family should know so you can feel confident, prepared, and protected,wherever the military takes you next.

Why Military Families Need More Than a Basic Will

Most service members can get a free will through the JAG office, which is incredibly helpful - but it’s also very limited. A basic will doesn’t include many tools that military families often need, such as:

• A trust to protect your children and keep things private

• Planning for blended families or complex family dynamics

• Protecting assets if something unexpected happens

• Making sure a child with special needs is fully provided for

• Powers of attorney so someone can handle finances and decisions while you’re away

• Clear guardianship planning for minor children

• Because military life can change quickly, planning ahead ensures your children, finances, and personal decisions are protected without delay or confusion.

How Frequent Moves Affect Your Estate Plan

Most military families move every 2–3 years. Those relocations affect far more than boxes and furniture; they also impact:

• Your finances, especially if you’re buying, selling, or renting homes.

• Your local support system

• The legal rules that apply to your documents

• A will or trust created in one state may not fully match the laws in the next state you move to.

• And major life events like marriage, divorce, new babies, and buying a home may require updates too.

Keeping your documents up to date means your family is always protected, no matter where you’re stationed.

“Deployment Readiness” for Your Family

Before a deployment, taking a little time to get documents in order can create enormous peace of mind. That often includes:

• Wills and/or trusts

• Updated beneficiary designations

• Guardianship decisions for your children

• Financial and medical powers of attorney

• Instructions for digital assets (online accounts, passwords, etc.)

• A simple “letter of instruction” explaining: who to contact, where important documents are kept, and what bills or financial tasks may need attention

Deployment can happen fast. Having everything organized ahead of time helps your family stay grounded and secure while you’re away.

We Can Help! Ready to get your own estate plan started? Start by booking a Peace of Mind Planning Session. We’ll answer your questions, go over your options and our flat fees, and decide if we want to move forward. Mention this blog and we’ll waive the $450 session fee! Book here: https://calendly.com/marissapetilloestateplanning/peaceofmindplanningsession

The 3 Biggest Downsides of DIY Estate Planning

With so many online options for creating your own will and estate planning documents, it’s tempting to go the DIY route. While this might seem quick and affordable, there are some major drawbacks to consider. Here are 3 big reasons to think twice before tackling your estate planning alone:

1. Risk of Errors and Omissions

Estate planning involves complex legal language it takes lawyers years to master, and small mistakes can have big consequences. For example, a simple typo or missed signature could make your will invalid, leaving your estate to be distributed according to state law. Also, many DIY options don’t include essential documents like a financial power of attorney or health care proxy, which are crucial if you become incapacitated. 

2. Inability to Customize

Online templates often assume a “one-size-fits-all” approach, which rarely applies when it comes to personal matters like family dynamics, unique assets, or specific goals. Imagine someone with children from two marriages who wants to provide for all of them differently. A DIY estate plan may not allow for specific distributions or conditions, potentially leaving some children with less or more than intended. This can cause heartache and conflict down the road.

3. Lack of Legal Advice

 Estate planning involves not only understanding your wishes, but knowing the laws that apply to them. Without professional guidance, legal considerations like taxes or the rights of specific heirs could go overlooked. On top of that, the laws change. An estate planning attorney can provide insight into how your plan will play out legally, offering up to date solutions an online form can’t provide. 

We Can Help!

A proper estate plan saves more than it costs. Learn more about your options by booking a Peace of Mind Planning Session. We’ll answer your questions and talk about your options, including if a will or a living trust makes sense for your family. Then we’ll share our packages and fees, and, if we decide we’re a good fit to work together, discuss next steps. Mention this blog and we’ll waive the $450 session fee!

The Estate Tax Is Changing in 2026 — Here’s What That Means for You

There’s a major change coming in estate planning, and it may affect your family without you even realizing it. Right now, the federal estate tax exemption — the amount you can pass on without paying any estate tax — is $13.99 million per person in 2025. But starting January 1, 2026, that number is expected to drop by about half, to somewhere between $6–7 million per person (exact amount to be adjusted for inflation).

This means many families who were previously under the threshold could suddenly be facing a large estate tax bill. For example, if you own a home worth $2 million, have $2 million in investments, $1 million in retirement, and $4 million in life insurance, your gross estate is $9 million. That’s under the current threshold, but may be over the new one starting in 2026. This could put your family at serious risk for a big tax bill when you’re gone. Start Planning Today!

The good news is, there are smart, legal strategies available to help reduce your tax burden. That’s why 2025 is such a critical window to review your estate plan, update your documents, and explore whether gifting or trust strategies make sense for your situation. Start by booking a Peace of Mind Planning Session. We’ll walk through your options, go over our flat fees, and if we decide we’re a good fit to work together, discuss next steps. Book today here: https://calendly.com/marissapetilloestateplanning/peaceofmindplanningsession

What Is an Executor—and Why Choosing the Right One Matters

When someone creates a will, one of the most important decisions they make is choosing the executor - the person legally responsible for carrying out the instructions in the will after they pass away.

Many people pick an executor quickly, almost as an afterthought, without fully understanding what the role involves. But serving as an executor isn’t just a formality or a title. It’s a serious job, with legal responsibilities, deadlines, paperwork, and emotional complexity.

Choosing the wrong person can cause delays, family conflict, and even financial consequences. Choosing the right person can make all the difference in how smoothly your estate is handled.

What Does an Executor Actually Do?

Think of an executor as the “project manager” of your estate. Their responsibilities include:

• Locating the will and filing it with the court

• Opening a probate case

• Notifying banks, government agencies, and creditors

• Gathering and valuing assets

• Paying final bills, debts, and taxes

• Managing real estate (sometimes selling it)

• Handling paperwork and deadlines

• Distributing assets to the beneficiaries

• Keeping detailed records and reporting to the court

This process can take months—sometimes more than a year, depending on the complexity of the estate.

Why the Right Executor Matters

An executor must juggle financial, legal, and emotional responsibilities, often while grieving the loss of a loved one. That’s why the qualities of the executor matter far more than titles, birth order, or family roles.

You want someone who is:

1. Organized and Responsible

There are deadlines, forms, and strict court rules. An executor who procrastinates or loses paperwork can create real problems.

2. Financially Savvy

They don’t need to be an accountant, but they should be comfortable with numbers, bills, and taxes.

3. Fair and Level-Headed

Family emotions run high after a death. You want someone who can stay neutral, communicate clearly, and avoid inflaming conflicts.

4. Trustworthy

This person will have access to your assets. Integrity is non-negotiable.

5. Willing and Able

This role takes time. Someone who is overwhelmed, overextended, or unreliable is not a good choice - even if you love them dearly.

Who Should You Choose?

Many people automatically pick their oldest child or closest relative. But those may not be the best choices. Sometimes a younger sibling, a close friend, or even a professional (like an attorney) is better suited.

What matters most is not family hierarchy; it’s finding someone who can handle the responsibility with clarity, honesty, and care.

We Can Help!

Ready to get your own estate plan started? Start by booking a Peace of Mind Planning Session! We’ll answer your questions, go over your options and our flat fees, and decide if we want to move forward. Mention this blog and we’ll waive the $450 session fee! Book here: https://calendly.com/marissapetilloestateplanning/peaceofmindplanningsession

Estate Planning Has Changed: Why Most Families Now Choose Living Trusts Over Wills

Estate planning used to be simple: you met with a lawyer, signed a will, and called it a day. But the world, and the law, have changed. Fast-forward to today, and more and more families are choosing living trusts instead of traditional wills. Here’s why.

Wills go through probate. Trusts don’t.

A will has to be filed with the court after you pass away. That process, called probate, can take months (sometimes over a year), cost thousands in legal fees, and make your private family matters public record.

A living trust, on the other hand, lets your successor trustee handle everything privately and quickly. No court delays, no unnecessary expenses, no public drama.

Modern families are more complex.

Blended families, second marriages, kids from prior relationships are common today. Life is more layered now than it was a generation ago. A trust gives you far more control and flexibility to customize how, when, and to whom your assets are distributed. It can even protect your children’s inheritances from divorce or creditors.

People value privacy and simplicity.

In the digital age, privacy matters. Unlike a will, a trust never becomes public record. It’s a private instruction manual for your loved ones, and it’s built to work efficiently, even if you own property in multiple states.

Planning isn’t just for death anymore.

A living trust also helps if you’re alive but unable to manage your affairs. Your chosen trustee can step in right away to pay bills or handle investments without court involvement — something a will simply can’t do.

The new normal.

Today, most attorneys consider a living trust the gold standard for comprehensive estate planning. It’s the modern way to make sure your wishes are honored and your family avoids unnecessary stress.

Next Steps

Ready to check “estate planning” off your to-do list? Start by booking a Peace of Mind Planning Session. This is a 1-hour meeting with me. We’ll answer your questions and go over your options and our flat fees. Then, if we decide we’re a good fit to work together, we’ll discuss next steps. Mention this blog and we’ll waive the $450 session fee.

Life Insurance: The Most Overlooked Tool in Your Estate Plan

Most people think life insurance is just about replacing income - a safety net to make sure your family can pay the bills if something happens to you. And yes, that’s part of it.

But here’s the real secret: life insurance can be one of the smartest ways to create instant wealth for your family and keep your estate plan running smoothly.

When someone passes away, even a well-organized family can face unexpected costs. Final expenses, taxes, legal fees, or just time away from work can all add up. Life insurance provides immediate cash to cover all that, without your loved ones needing to sell assets or dip into savings. Think of it as a love letter in financial form - money that arrives exactly when your family needs it most.

It’s also incredibly flexible. You can use life insurance to:

• Cover final expenses and make things simple for your family.

• Replace lost income so your spouse or kids can stay in the home.

• Leave a legacy to loved ones or a favorite charity.

• Balance inheritances, for example, one child keeps the family cabin, another receives insurance proceeds.

Unlike other assets, life insurance is fast. There’s no waiting on courts or paperwork. The money goes directly to your chosen beneficiaries, usually within weeks, assuming they are at least 18 and still alive.

And it’s not just for parents with young kids. Empty nesters, retirees, even single professionals can use life insurance as part of a smart estate plan, especially if you want to leave a meaningful gift or make sure your loved ones aren’t left sorting out financial details during a tough time. Bottom line: life insurance isn’t about expecting the worst. It’s about planning for the people you love.

Next Steps

Ready to check “estate planning” off your to-do list? Start by booking a Peace of Mind Planning Session. This is a 1-hour meeting with me. We’ll answer your questions and go over your options and our flat fees. Then, if we decide we’re a good fit to work together, we’ll discuss next steps. Mention this blog and we’ll waive the $450 session fee.