Nobody wants to think about dying with debt. But here’s the uncomfortable truth: most people do. According to recent data, over 70% of Americans die with some form of outstanding debt. If you’re reading this while living in Georgia and carrying a mortgage, credit card balance, student loans, or medical bills, you’re not alone—and you’re not out of options.
The question isn’t whether you can do estate planning with debt. You can. The real question is what happens if you don’t.
Your Debt Doesn’t Die With You
When someone dies in Georgia, their debts become the responsibility of their estate—the collection of assets they leave behind. This doesn’t mean your kids inherit your credit card bills. It means creditors get paid from your assets before anyone else does.
Here’s how it actually works: After you die, the executor of your estate (the person you name in your will, or someone appointed by the court if you don’t have one) must notify your creditors. Georgia law gives creditors a window—typically a few months—to come forward and make claims against your estate. The executor then pays these debts from your assets according to a specific order set by state law.
Administration costs come first. Court fees, attorney costs, executor compensation. Then funeral expenses. Then medical bills from your final illness. After that, other creditors line up based on priority. If there’s money left over, your beneficiaries get it. If there isn’t, they don’t.
The important thing to understand: your family members don’t personally owe your debts unless they co-signed on a loan or share the debt in some other legal way. But they might receive a much smaller inheritance—or nothing at all—if your debts eat through your estate.
Georgia-Specific Rules You Should Know
Georgia has some unique provisions worth knowing about, especially if you’re married or have minor children.
The most significant is Year’s Support. This allows a surviving spouse and minor children to petition the probate court to set aside a portion of the estate for their support—potentially before creditors get paid. It’s not automatic, and it won’t eliminate all debts in every situation, but it can provide meaningful protection for families facing financial strain after losing a spouse or parent. The amount depends on factors like the family’s lifestyle before death and their current needs. Courts consider what the family reasonably needs to maintain their standard of living for a year following the death.
Georgia also follows specific rules about which creditors get priority. The state’s statutory framework means some debts must be paid before others. Understanding this hierarchy matters when you’re planning how to structure your estate.
One thing that surprises many Georgia residents: the state doesn’t have its own estate tax. You only need to worry about federal estate taxes, and those only kick in for estates exceeding the federal exemption threshold (which is quite high—over $12 million for individuals as of recent years). For most people, estate taxes aren’t the concern. Creditor claims are.
Taking Stock of What You Owe
Before you can plan around your debt, you need to know exactly what you’re dealing with. Most people underestimate what they owe. Old accounts slip through the cracks. Medical bills from three years ago sit in collections. That co-signed loan for your nephew? Still on your record.
Start by pulling your credit reports from all three bureaus—Equifax, Experian, and TransUnion. You can get these free annually at AnnualCreditReport.com. Then gather every statement you can find: mortgage documents, car loans, credit cards, student loans, personal loans, medical bills.
Make a list. For each debt, write down the balance, interest rate, minimum payment, and whether anyone else is on the hook for it. That last part matters more than you might think. If your spouse co-signed your car loan, they’re responsible for that debt whether you’re alive or not. Same goes for any other co-signer.
While you’re at it, list your assets too. Bank accounts, investments, retirement funds, real estate, vehicles, life insurance policies. You need the full picture to plan effectively.
The Core Documents
Estate planning in Georgia typically involves a few key documents, and each one plays a role when debt is part of the equation.
A will determines who gets what and names an executor to manage the process. When you have debt, your will can include specific instructions about how certain obligations should be handled—like whether to sell the house to pay off the mortgage or let a beneficiary assume the loan.
A financial power of attorney lets someone manage your money if you become incapacitated. This person can pay your bills, negotiate with creditors, even refinance loans on your behalf. Without this document, your family might watch your accounts go delinquent while you’re in the hospital, unable to write checks.
A healthcare directive handles medical decisions, but it connects to your finances too. Extended medical care creates debt. Someone needs authority to make treatment decisions that affect both your health and your estate.
Trusts offer more sophisticated options. A revocable living trust lets your assets bypass probate, which can speed up distribution and reduce costs. But assets in a revocable trust are still considered yours during your lifetime—creditors can reach them. An irrevocable trust is different. Once you transfer assets into one, they’re no longer yours. If structured properly and funded well before any creditor claims arise, those assets may be protected. This is complex territory that requires professional guidance.
Strategies That Actually Work
Paying down debt while you’re alive remains the most straightforward approach. Every dollar you eliminate now is a dollar your beneficiaries won’t lose later. Consider negotiating with creditors for lower interest rates or settlements. Consolidate high-interest debts into lower-interest loans. Work with a nonprofit credit counselor if you need help building a plan.
Two popular methods can accelerate your progress. The debt snowball focuses on paying off your smallest balance first, regardless of interest rate. You get quick wins that build momentum. The debt avalanche targets your highest interest rate first, which saves more money over time. Either works—pick the one that matches how you’re wired.
If your debt situation is severe, bankruptcy might be worth considering. Chapter 7 can discharge many unsecured debts, giving you a fresh start. Chapter 13 restructures debt into a manageable repayment plan. Both have serious consequences for your credit and some limitations on which debts can be eliminated. Georgia has its own exemptions that determine what property you can keep. This is last-resort territory, but for some people it’s the right move—and it can actually make estate planning simpler by eliminating obligations that would otherwise drain your estate.
Life insurance deserves special attention. A policy with a named beneficiary typically bypasses probate entirely. The death benefit goes directly to your beneficiary, not through your estate, which means creditors generally can’t touch it. This makes life insurance one of the cleanest ways to ensure your family receives something regardless of your debt situation.
The coverage amount matters. If you’re carrying $200,000 in debt and want your family protected, factor that into your policy decision. Term life costs less than whole life and works well if your primary goal is debt coverage during your working years. Whole life builds cash value over time but comes with higher premiums—it makes sense for some situations but not all.
One advanced strategy: an irrevocable life insurance trust (ILIT). This removes the policy from your estate entirely, which can have tax benefits for very large estates. It also adds another layer of protection from creditors. But ILITs are complex and inflexible—once you set one up, you can’t easily change it. Most people don’t need this level of sophistication, but it’s worth knowing the option exists.
Beneficiary designations on retirement accounts and bank accounts work similarly. A 401(k) with a named beneficiary passes outside probate. Same with IRAs and pay-on-death bank accounts. Review these designations regularly—after marriages, divorces, births, and deaths in the family.
Trusts for Asset Protection
If you’re concerned about protecting specific assets from creditors, trusts offer options worth exploring with an attorney.
A spendthrift trust protects assets from your beneficiaries’ creditors. If you’re leaving money to a child who has financial problems or faces potential lawsuits, this structure keeps their inheritance safe from their own debt collectors.
An irrevocable trust can potentially shield assets from your creditors, but only if done correctly and well in advance of any claims. You can’t transfer your house into a trust the week before filing bankruptcy and expect it to be protected. Courts look for fraudulent transfers and will unwind them.
These tools require careful planning and professional help. The wrong structure—or bad timing—can create more problems than it solves.
Keep Your Plan Current
Estate planning isn’t a one-time event. Your debts change. Your assets change. Your family changes. Georgia law occasionally changes too.
Review your plan at least once a year. Major life events—marriage, divorce, births, deaths, job changes, health diagnoses—should trigger an immediate review. If you pay off a major debt, update your plan. If you take on new debt, update your plan.
Keep your beneficiary designations current across all accounts. These override whatever your will says, so conflicts between the two create legal headaches for your family.
Common Mistakes to Avoid
People make the same errors repeatedly when dealing with debt and estate planning. Knowing what not to do can save you and your family significant trouble.
Don’t hide debt from your family. Your executor will discover everything during probate anyway, and surprises create resentment and confusion. Have honest conversations now about what you owe and what your plan looks like.
Don’t assume your spouse automatically inherits everything without complications. Georgia law provides certain protections, but creditors still have rights. Joint debts remain joint responsibilities. The surviving spouse might need to refinance or sell assets to settle estate obligations.
Don’t forget about digital assets. Online accounts, cryptocurrency, digital businesses—these have value and may have associated debts or subscriptions. Include them in your planning and make sure your executor can access them.
Don’t wait until you’re debt-free to start planning. That day might never come, and in the meantime, you’re leaving your family exposed. A plan with debt is infinitely better than no plan at all.
Finding the Right Help
Look for a Georgia attorney who specifically handles estate planning with debt considerations. The State Bar of Georgia maintains a directory. Ask for referrals from friends, family, or financial advisors. Most attorneys offer initial consultations where you can assess their experience and communication style.
A good estate planning attorney will want to see your complete financial picture—assets and debts—before recommending strategies. Be wary of anyone who pushes a specific product or structure before understanding your situation.
The Bottom Line
Debt complicates estate planning, but it doesn’t prevent it. In fact, having debt makes planning more important, not less. Without a plan, your family faces a confusing probate process, potential disputes with creditors, and the emotional burden of sorting out your affairs during grief.
With a plan, you control the outcome. You decide which assets get protected. You choose who manages your estate. You determine how debts get handled. Your family gets clarity instead of chaos.
Start with an honest assessment of what you owe and what you own. Talk to an attorney about the options that fit your situation. Put the right documents in place. Then revisit the plan regularly as your life evolves.
The people who handle this well aren’t necessarily the ones with the least debt. They’re the ones who looked at their situation honestly, made a plan, and followed through. They communicated with their families about what to expect. They kept their documents updated and their beneficiary designations current.
Your debt doesn’t have to define your legacy. What you do about it might.
