It is important to understand the dynamics of debt and dying, because 73% percent of Americans pass away with debt. The average amount of debt at death is approximately $62,000 according to FOX Business in "Americans Are Dying with an Average of $62K of Debt."
The only type of debt that completely disappears when the debtor passes away is federal student loans. However, even then the proper paperwork must be filed. The same situation is not necessarily true with other types of student loans.
Other types of debt must be paid by the estate, before any assets are distributed to heirs.
Thus, if a person passes away owing $100,000 and having assets of $150,000, then the estate must pay the debt and only the remaining $50,000 can be inherited by heirs.
If the estate does not have enough assets to cover the full amount of the debt, then heirs are not responsible to pay it. However, there are exceptions. For example, if the estate contains a home, then the value of that home might be used to pay the debt even if other people are living in it. As a result, the heirs might need to pay the debt to stay in the home.
The issue of debt and death can get very complex. If you have any questions, it is a good idea to talk to an estate planning attorney who can help you manage what will happen to any debt you have when you pass away.
Reference: FOX Business (March 21, 2017) "Americans Are Dying with an Average of $62K of Debt."