Inheriting a Spouse’s Debts

By on January 8, 2019

My question is about each married individual’s responsibility in case of the death of the other. I will use my husband and I as an example. We have separate bank accounts, separate loans, and separate credit cards except for our heating utility company. Our marriage is the second for each of us. While I have established a very good credit history, my current husband has bad credit. Will I be responsible for paying off his debts if he should die first? I have never used his credit cards and my name is not on any accounts of his. Our cars are also only listed in his name or mine.
Nancy

While none of us like to think about it, we should all be prepared for our own deaths and those near to us. Nancy is very smart to ask these questions now while she can still take any corrective action that’s necessary.

There are two ways that you can find yourself being responsible for another person’s credit card debts. The first is if you agree to be responsible for debts incurred on the card. You’ll need to sign an application for this to happen. Generally you’ll be the owner/co-owner of the account or have co-signed on the account. But, you’ll know if you’ve obligated yourself this way (unless you didn’t bother to read what you were signing). In Nancy’s case, it appears that she hasn’t done that.

The second way that you could be is less obvious. Let’s take Nancy’s situation. Suppose that she is not personally responsible for the card. Only her husband (from now on known as “Hubby”) is. So if Hubby should die, the credit card company must look to his assets for payment. What does he own? Anything that’s titled in his name (like the car that Nancy mentioned) is fair game for creditors. So if Hubby is not on the title to Nancy’s car, the car should be safe from his creditors.

READ  New Research Report on the Geography of Credit Invisibility

Where it gets tricky is with anything that’s owned in a joint account. In some joint accounts you only own your portion of the account (i.e. half of an account with two joint owners or 1/3 of an account with three owners). But in most, it’s assumed that either party owns all of the account. In other words, either Nancy or Hubby could write a check for the entire balance of a joint checking account. In this case, the credit card company would say that Hubby owned all of the checking account and claim the entire balance to pay off Hubby’s credit card bill. And, they’d get the money.

Nancy has been wise to . She’s gone a long way to avoiding debts that aren’t her debts, but there’s still one more hurdle that she’ll need to clear.

There’s a patchwork of state laws that must be considered. For instance, your state may have a law that says that it’s assumed that half the property acquired during a marriage belongs to each partner. That could mean that half of your property (including savings accounts, etc.) is available to pay your spouse’s debts. Only research in your state laws will alert you to all the dangers. In some cases, a lawyer will be required.

Whether Nancy needs to talk with one will depend on her circumstances. She can do the basic things herself (and for the most part she already has). Keep separate credit card accounts. Don’t co-sign or guarantee any loans. Keep your assets separate.

If either Nancy or Hubby has significant assets (and, you’ll need to decide what “significant” means to you), it might be wise to see an attorney. If you come in with the facts and specific questions, it shouldn’t be too expensive to find out if you have any exposure to debts that you didn’t create.

READ  CFPB Report Warns That Taking Out a Reverse Mortgage Loan Can Be an Expensive Way to Maximize Social Security Benefits

As a general rule, , but the exceptions to this rule can be really expensive! So find out before it’s too late.

This article by Gary Foreman first appeared on and was distributed by the .

The post appeared first on .

Last step, fill out the information below or call us for Priority Assistance.

What problems are you having with your report?

Your first name is required. Your first name is required to be at least 2 characters. Your first name cannot be longer than 50 characters.
Your last name is required. Your last name is required to be at least 2 characters. Your last name cannot be longer than 50 characters.
Your email is required.
Your phone is required. Your 10 digit phone number is required.
Your state is required.
Your age is required. Your age must be greater than 18. Your age must be less than 100.

By clicking on the "Contact Me" button above, you consent, acknowledge, and agree to the following: Our Terms of Use and Privacy Policy and to receive electronic communications. We take your privacy seriously. That you are providing express "written" consent for Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS - charges may apply), even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list. Consent is not required as a condition to utilize Debt.com services and you are under no obligation to purchase anything.

By clicking on the “Contact me” button above, you consent, acknowledge, and agree to the following: (1)That you are providing express “written” consent for Lexington Law Firm, Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS – charges may apply), or dialed manually, at my residential or cellular number, even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list; and (2)Lexington Law’s and and Debt.com’s Terms of Use and Privacy Policy. Consent is not required as a condition to utilize Lexington Law or Debt.com services and you are under no obligation to purchase anything.

About Research Department

Here is where you will find important stories located from around the web which can impact you and your financial life.
%d bloggers like this: