Question: “I have credit debt, but my wife isn’t a user on the card. What happens to my debt when I die? Will she be responsible?” – Bill in Oklahoma
Howard Dvorkin answers…
First, I hope this is a general question and not something serious. If it is serious, I hope you recover, and I applaud you for thinking about others at such a time.
Second, the answer to your question depends on where you live, and on some other details as well. Let’s break it down.
There’s a lot of confusion over what are called community property states. But if you live in one, it can cost you NOT to know how they work. Here are the states we’re talking about…
- Arizona
- California
- Idaho
- >Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
In these states, any income or assets that you and your spouse create during your marriage is subject to collections. What does that mean practically speaking?
Well, it means a spouse can be responsible for a debt even if they didn’t co-sign it – or have much to do with it at all. Community property also extends to everyday things like furniture and electronics – as long as they were bought after the marriage was official.
So in a divorce, all property is divided. And in a death, a spouse can only transfer half of the marriage’s community property in their individual will. If you live in one of these states, you need to understand what the rules. Debt.com can help you, as part of its free debt analysis it offers every American – regardless of where they live.
Where you live
Nine out of 50 states are community property states. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin consider all the property and debt acquired in marriage to belong to both partners. That’s true even if only one spouse made money or lost money.
Fortunately, Bill, you live in Oklahoma. So that’s one less problem you must face.
What debts you have
I assume when you say “credit debt,” you’re referring only to credit cards and nothing else. It’s an important distinction because some debts are different after death. For instance, a surviving wife might be responsible for her deceased husband’s private student loans – even if they don’t live in one of those community property states.
How you set up that debt
If your spouse has co-signed any loan, they’re responsible for that debt. That goes for anyone, not just married couples. You mention that your wife isn’t a “user” of your credit card, but the more important question: Is it a joint card? Even if she doesn’t use it, if her name is on the account, she’s on the hook for the balance.
In general
If this all sounds sort of vague, it’s intentional. When it comes to death and debt, there are loopholes and exceptions all over the place. Generally speaking, however, a surviving spouse isn’t obligated to pay the debts of the deceased spouse.
What to do NOW
Whenever I’m asked questions like this (and that’s often), I’m always glad when it’s not related to a serious illness. That means there’s still time to take steps now before we all face the inevitable. While planning for our own deaths is certainly not fun, it’s definitely important.
[For further information, check out What Happens to Your Debt When You Die?]
