Credit Card Debt Affects Spouses Even After Death

One of the worst experiences in life is that of losing a spouse. These times can be trying both personally and financially. There are funeral costs to attend to, along with other financial concerns that one must contend with when a spouse passes away. Some people have asked whether or not they have to pay off their deceased spouses’ credit card accounts after they have passed away.

This is a complex question, and there is no easy answer for every potential scenario. For example, different states have different laws concerning these types of situations. Also, there is a question of whether or not there are any assets that are claimable. In the majority of states, you are not responsible for any accounts that your spouse has opened, unless you are a joint account owner. If your name is not on a credit card for that particular credit card account, you are not a joint owner of the account in question.

IN some states – community property states – like, Arizona, Idaho, Louisiana, California, Texas, Washington, Wisconsin and New Mexico, you could find that you are responsible for a deceased spouse’s credit card debt if the spouse dies prior to the debt being retired. Community property states have rules that say that if a debt is owned by either spouse during the course of the marriage that the debt is officially a joint debt. Even if a spouse does not have a card with their name on it, if they live in one of these states the law says that the debt was acquired during the marriage, so the living spouse is responsible for paying it off.

When someone passes away, their outstanding debts are sent over to the deceased person’s estate. Essentially, if your spouse were to pass away before you do, any entity that the spouse owed money to would be allowed to make a claim for payment of debts from the estate. If the amount owed were sizable, the creditor would likely jump at the chance to make a claim as soon as they were notified of the death. If the estate does not have adequate funds to pay the debt off, and if you don’t live in a state with community property laws, you are not responsible for the debt and it will not be paid off. In a community property state, however, the creditor can come after the surviving spouse for full payment of debts owed.

However, if the estate has enough money to pay the debt, things change a bit. The person who executes the estate – in many cases, the living spouse – is expected to pay the debt from the funds in the estate. In other words, even if you don’t live in a community property state, if the deceased spouse’s estate has sizable assets, the creditor still has a valid reason to expect payment to be made.

The last thing that any spouse wants their surviving spouse to deal with upon their passing, is money issues. However, because so few people understand exactly how the estate laws work in their states, it is easy for people to get inundated with requests for debt repayment after their loved ones pass away. Make it a point to discuss your situation and the laws of your state with a qualified estate attorney to know what you may potentially have to deal with, financially speaking, if your spouse were to pass away. It is a morbid subject, but one that couples should visit from time to time to fully prepare for the future.

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