The CESI survey found that while many retirees charged trips and entertainment, 53 percent used their credit cards to pay for medicine, doctor visits and other medical expenses.
As for the types of retiree debt, the survey found:
- 35 percent had credit card debt.
- 30 percent had mortgage debt.
- 19 percent had auto loan debt.
- 4 percent had student loan debt.
- 11 percent had other debt.
When asked how they had spent money borrowed after retirement, more than 75 percent of those surveyed cited medical or funeral expenses. Other big categories were leisure activities (31 percent); clothing, accessories and jewelry (33 percent); and vacation and travel (39 percent).
As a result, prospective heirs often find there's nothing left for them.
Who pays the debt?
Could they be in for yet another surprise ? Could relatives be legally responsible for debts left by the departed?
"Not usually," says Frank Bartle, an attorney at the Lansdale, Pa., law firm of Dischell, Bartle & Dooley. "Generally, the deceased's estate is responsible for paying his or her debts. If there isn't enough in the estate to cover the debts, they typically go unpaid."
One exception would be a balance on a credit card jointly held by the deceased and an heir. In that case, the heir would be responsible for the debt.
"In most cases, though, debt follows the deceased," Bartle says.
So, while you may not get that inheritance you've been looking for, you won't inherit any debt either.
Also of interest: Bequeath what's in your heart. >>
William J. Lynott is an author and freelance writer who specializes in business and financial issues.