If your wife or husband has passed recently, we understand this is a difficult time. And thinking about finances can make it even more difficult.
Here’s some comfort: you’re typically not personally responsible for paying off your spouse’s debts after they die, because any loans would normally be paid off by their estate. This includes credit card debt, student loans, car loans, mortgages and business loans.
But it’s not always so cut-and-dried, as we’ll see.
What Happens To Your Spouse’s Debt When They Die?
After the loss of a spouse, before doing anything, take a sec to catch your breath and make sure you understand your rights and responsibilities regarding debt collection.
You may not be liable for some debts, including even certain types of credit card charges, which may be forgiven at death. However, other debts can linger much longer.
When a spouse passes away owing a debt, the debt doesn’t immediately disappear. Instead, the estate is liable, and the personal representative, executor, or administrator will pay those debts owed from the money in the estate.
What Debts Is The Surviving Spouse Responsible For?
If you (the surviving spouse) inherits certain assets from the deceased spouse through beneficiary designations or joint account ownership, and the estate assets are not enough to satisfy the creditors, creditors may try to make a claim against those assets that pass directly to the surviving spouse outside of the probate estate.
A surviving spouse may also be responsible for certain types of debts. For example, if the debt is jointly owned or he or she has co-signed a loan, the surviving spouse is obligated to continue to pay this debt. There are also states that require a surviving spouse to pay off any medical bills the deceased incurred before their death.
If the surviving spouse is a joint account holder on a credit card, he or she would need to continue to pay off the credit card because both spouses are both considered owners of the account and share equally in the ownership of any charges on the card.
What About Community Property States?
You should be familiar with the laws of your state, so you know your liability on all debts. This is because some community property states say you’re responsible for the debt, even if it’s not in your name. Community property laws make both spouses equally liable for debts incurred after the marriage has taken place.
There are currently nine community-property states:
- New Mexico
What Should You Do If Debt Creditors Are Harassing You?
Unfortunately, some debt collectors are inappropriately aggressive. Therefore, if a debt collector says you’re responsible for the account balance, but you think you’re not, ask for evidence. Speak with an experienced estate planning or elder law attorney to understand in what situations you are obligated to pay and when you’re not.