Am I Liable For My Deceased Spouse's Debts?

If a credit card is in my deceased spouse's name, am I responsible for paying the balance?

If a credit card is in my deceased spouse's name, am I responsible for paying the balance?

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Highlights


  • Understand that most debts are not forgiven when the debtor dies.
  • Examine how being in a community property state affects you.
  • Look into all options for resolving debt, if you are stuck with the responsibility to pay it.

My condolences on your loss. If you remember anything I am about to write, please let it be this: Do not believe legal advice from collection agents. The legal advice collection agents tell people is usually incomplete or wrong, and is always self-serving.

Deceased Spouse’s Debt

Some people assume a decedent’s debt is forgiven or possibly written off by creditors. The law does not work that way, with the exception of federal student loans. However, spouses or other relatives are not responsible for the decedent’s debt automatically, either. Many collection agents take advantage of a debtor’s grief and ignorance of the law to imply the family must pay the decedent’s debt, but that may not be the case.

When a person dies with a will, the will controls the financial affairs of the decedent’s assets, which is called the “estate.” A will distributes assets, not debts. However, before any assets can be distributed to the heirs, all known debts must be paid by the executor. Therefore, the executor will sell assets in the estate to pay for any debts that remain. Only after the debts are paid will the remaining assets be distributed among the beneficiaries of the will.

If a person dies without a will, this is known as “dying intestate” in lawyer-speak. In this situation, the court appoints an administrator to handle the distribution of the decedent’s assets according to the laws of the state. As with dying with a will, assets are distributed after debts are paid.

Here is a key point: If the estate is insolvent the creditor has no legal right to collect the debt from family members, children, or friends. There is no feudal debt bondage that ensnares an entire family, at least not in the US. In most states, the creditor cannot collect from the spouse either. However, in community property states, the question becomes more complicated.

Deceased Spouse’s Debt in Community Property States

Community property states include Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Generally speaking, in community property states, debt incurred by a spouse for the benefit of the family is considered a “community” debt, and therefore the spouse is responsible for repaying that debt.

However, no two community property states use exactly the same laws. As a consequence, if you live in a community property state and have a spousal debt issue, it is imperative that you consult with an attorney in your state who has probate law experience so that you understand your rights and liabilities in your particular circumstances.

Summary

For additional information, see the Federal Trade Commission documents Paying the Debts of a Deceased Relative: Who Is Responsible? and FTC Issues Final Policy Statement on Collecting Debts of the Deceased.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

120 Comments

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  • MT
    Jul, 2012
    melissa
    My husband was in the hospital in 08, he passed away in 09. In collections a bill in his name, which I have a copy of was in his name and they switch it into my name and they are taking me to court and I told them he passed away and it is only me and my 2 girls and I can't affor to pay upfront or payments to our incoming bills $1500. Can they switch the names and take me to court and make me pay his bill? Thats not right.
    0 Votes

    • BA
      Jul, 2012
      Bill
      What you described is possible under three circumstances:
      • At some point during your spouse's hospital stay, you signed a document, called a guarantor agreement, indicating you accept responsibility for the debt if your spouse does not pay it.
      • You and your spouse resided in a community property state where the presumption is the debts incurred by one spouse are owed by both.
      • You and your spouse resided in a state with a doctrine of necessaries rule that requires spouses to pay for their spouse's necessities of life.

      Do not assume you have liability for the debts just because the hospital's collection agent says so. Consult with a lawyer in your state who has consumer law experience to learn if the hospital's assigning the debt to you is consistent with your state's laws.

      0 Votes

  • JH
    Apr, 2012
    Jan
    Yes I was wondering if you would be so kind to answer a couple questions for me please. My sister passed away in January 2012, she had a will and my siblings and I were appointed the executors of her estate. We have tried to grant all of her wishes but unfortunately not everything was in order as she thought... She had a little insurance policy that allowed us to pay for her funeral expenses and all her outstanding debt, utilities, credit card debt and miscellaneous. Where the problem comes in is that she owned her own home, was never married so had no children and her name is the ONLY name on the deed and loan of her home. She did not leave any of her siblings as a beneficiary. My question for you is we feel forced to let the bank foreclose on the home as we can not pay off the outstanding debt, there is no money to do so. We continued to pay on the home as long as we were able with the money that was left from the insurance policy. Now that we have decided to let the home go back we are being told that we may still be held responsible since we were appointed the executors. Again our names are on nothing other than the will listing us as executors of the estate. I have been told even if I let the house go back that my own credit can be jeopardized. Will you please put my mind at ease with the real facts of the matter? I need to hear the correct information from someone that is an expert in this field. Thank you very much for any information you can give to me.
    0 Votes

    • BA
      Apr, 2012
      Bill
      Whoever told you executors have personal liability for the estate's unpaid liabilities misstates probate law. Consult with a lawyer in the decedent's state of resident who has probate experience to learn more about how to probate the estate in accordance with the law.
      0 Votes

  • TH
    Jan, 2012
    TL
    My sister died 4 years ago and she left me, my siblings and nephew on her will. my sister also left the will in the hands of an attorney as executive. Me and my sibling asked this lawyer to give the home to my nephew. We had nothing to do with the property and now 4 years later the home owners association is sueing me because my name was on the will. How do I remove my name from the property?
    0 Votes

    • BA
      Jan, 2012
      Bill
      You name appearing as a beneficiary on a will should not determine liability for a debt. Something else is going on here. Perhaps the property was never titled in the nephew's name? Consult with the probate lawyer you mentioned to learn more.
      1 Votes

  • JH
    Jan, 2012
    Jason
    My father in law has terminal cancer currently and the doctors are estimating another month of so for him to live, we reside in Texas. My question is this: Is his wife legally responsible for his unpaid medical bills and what happens to their home once he is deceased? Does the home get sold to cover the medical bills? She is the primary on their health insurance and she is on the title of house they own that is paid off.
    0 Votes

    • BA
      Jan, 2012
      Bill
      You mentioned Texas, and I will assume the people involved here are Texas resident's, too. The answer to your first question is maybe, depending on Texas' community property law and doctrine of necessaries. I want to emphasize the following two points:
      1. Consult with a Texas lawyer who has probate experience now
      2. Do not believe the legal advice from collection agents regarding the family's or spouse's liability for a decedent's debts. Collection agents have one job, and it is not giving complete or accurate legal advice.

      I am not answering your question deliberately. That is because I am not trained in Texas law, nor do I feel competent to offer an observation about the spouse's liability here. A lawyer's time is not cheap, but bad legal advice is expensive.

      0 Votes

  • SM
    Jan, 2012
    Stacey
    Hello - my brother just passed last week. He only had one outstanding debt which was a truck payment. He has no other assets. He was still legally married, but hadn't been with his spouse for several years. His name was the only name on the contract for the truck. At this point, can the truck just be turned back in to the company along with proof of his death or how exactly does that work? We live in the state of VA which isn't a community property state. Thanks for any assistance you can provide.
    1 Votes

    • BA
      Jan, 2012
      Bill
      The decedent's spouse should start the probate process so all of his assets and debts are accounted for properly, debts are paid, and assets distributed according to a will or state law. Consult with a probate attorney in the state where the decedent resided to start the process.

      You mentioned Virginia. If the decedent was a Virginia resident, see the Virginia Court Clerks' Association document Probate in Virginia (PDF), which discusses the general probate rules for Virginia.
      0 Votes