What Happens to a HELOC When You Die?

If you have a HELOC (home equity line of credit) and you’re thinking about your family’s future, you may be wondering something very specific:

When I die, can my children just sell the house and use the proceeds to pay off the HELOC — or do they have to pay it back instantly?

This is a smart question, and it’s also a common one. HELOCs are widely used, especially by older homeowners who want flexibility, and many families don’t think about what happens to that debt until they’re in the middle of settling an estate.

Here’s the reassuring truth:

In most cases, your children can sell the home and pay off the HELOC at closing.
They usually do not need to personally pay it back immediately out of pocket.

However, the HELOC doesn’t disappear. It becomes part of your estate, and the lender will expect it to be repaid as part of settling things.

In this article (Skip to...)

• Does a HELOC have to be paid off immediately when you die?
• What happens to the HELOC right after death?
• Scenario #1: Your children sell the house (most common outcome)
• Scenario #2: Your children want to keep the house
• Can your children assume the HELOC?
• What if the HELOC balance is higher than expected?
• How to make this easier for your family
• The bottom line
• FAQs about HELOCs after death

Does a HELOC have to be paid off immediately when you die?

A HELOC is secured debt. That means it’s tied to the home, similar to a mortgage.

When you die, your HELOC balance does not get forgiven. Instead, the debt becomes an obligation of your estate.

This is where the confusion comes in. People often hear phrases like “due and payable” and assume it means:

“The lender demands the full balance tomorrow.”

In reality, what it usually means is:

“The HELOC must be repaid as part of the estate process.”

That repayment often happens through the home sale.

So while the HELOC does need to be resolved, heirs are usually not forced to produce instant cash. Selling the home is one of the most common and straightforward ways to pay it off.

What happens to the HELOC right after death?

The immediate aftermath is usually more administrative than dramatic, but there are a few things families should expect.

That last point is important. Even if the estate plans to sell the home, the lender may still expect minimum payments in the meantime.

This is one reason families sometimes feel rushed. It’s not always because the lender is demanding instant payoff — it’s because payments and interest continue while the estate is being settled.

Scenario #1: Your children sell the house (most common outcome)

If your children plan to sell the home, the HELOC payoff process is usually straightforward.

Here’s how it typically works:

When the home is under contract, the closing company (title/escrow) requests payoff statements from all lienholders — including the HELOC lender. Then, when the sale closes, the HELOC is paid off from the sale proceeds before the heirs receive the remaining funds.

This is extremely common. It’s how most mortgage and HELOC payoffs work in a sale, regardless of whether the seller is living or the estate is selling.

So yes: your children can usually sell the house and pay off the HELOC at closing.

Scenario #2: Your children want to keep the house

The second scenario is where things can get more complicated.

If your children want to keep the home, they generally need a plan to deal with the HELOC balance. Most HELOCs cannot simply be “inherited” and continued the way they were.

In practice, heirs usually have two options:

Option 1: Pay off the HELOC

If your children have cash or other funds available, they can pay the HELOC balance and keep the home free of that debt.

Option 2: Refinance

More commonly, heirs refinance the home into a new mortgage in their own name and use that new loan to pay off:

• the HELOC
• and sometimes the original mortgage as well

This is often the cleanest solution, but it depends on whether the heirs qualify for financing.

Can your children assume the HELOC?

In most cases, no. Unlike some mortgages, HELOCs generally aren’t designed to be assumed by heirs. The lender approved the HELOC based on the original borrower’s credit and financial profile.

That said, each lender’s rules vary, and estate situations can be unique. But as a general rule, heirs should not assume they can simply keep the HELOC open.

What if the HELOC balance is higher than expected?

Sometimes families discover the HELOC balance is larger than they realized, especially if the HELOC was used over time for medical expenses, renovations, or helping family members.

If the HELOC balance is high, the most important factor becomes the home’s equity.

If there’s enough equity, the estate can still sell and pay off the HELOC. The heirs may simply inherit less.

If the HELOC balance is very large and the home value is lower than expected, the estate may need to explore additional options. In rare cases, selling may not fully cover all secured debt.

How to make this easier for your family

This is one of those topics where a little planning can save your family a huge amount of stress later.

If you have a HELOC, a few simple steps can make the estate process much smoother:

• Keep a copy of your HELOC statement or lender info in a place your executor can access
• Make sure your home’s title and estate plan are up to date
• Let your children or executor know the HELOC exists (many families don’t realize it does)
• Consider paying down the HELOC if you’re able and it fits your finances

Even just being transparent about the balance and lender can prevent months of confusion.

The bottom line

When you die, your HELOC doesn’t disappear — it becomes a debt of your estate. But in most cases, your children do not have to pay it back instantly out of pocket. They can usually sell the home and pay off the HELOC at closing, just like any other lien payoff.

The main thing to know is that interest and payments may continue while the estate is being settled, so having a plan (and clear paperwork) can make the process much smoother.

FAQs about HELOCs after death