The loss of a spouse is bad enough without thinking about how to settle her debts. The responsibility for paying them usually falls on the deceased's estate, but there are times the widow or widower may be liable for unpaid bills. Responsibility varies with state law, the nature of the debt and whether it was one spouse's obligation alone or a shared responsibility.
The deceased's estate is initially responsible for paying his debts. The executor must go over the deceased's records and contact creditors. State law may also require a death notice in the paper so that creditors who aren't in the file can put in a claim. The law gives these creditors a limited time to file, after which the debt becomes uncollectible. The executor must use the estate's assets to pay off the deceased's debts before distributing the assets to the heirs.
If the estate doesn't have enough assets to pay off the debts, creditors may be able to pursue the surviving spouse. If both spouse's names are on a credit-card account, for instance, the card company can hold the widower responsible for his wife's purchases. If the debt is in the deceased's name alone, responsibility may hinge on whether the couple lives in a community property or common-law state. In common law states, the living spouse isn't responsible for the deceased's individual debts.
If the spouses owned property together, the legal arrangement could make a big difference. If they owned their house jointly with right of survivorship, for example, the death of one spouse gives the other full ownership without probate; the house never becomes part of the estate, so there's no way creditors can put a claim on it. Tenancy in common, on the other hand, doesn't have a right of survivorship: The house must go through probate and could be sold to pay the deceased's debts.
Some state and federal laws provide exceptions to the general rules. If spouses file a joint return, they become liable for each other's individual tax debts. In North Carolina, one spouse can be held responsible for her spouse's individual medical bills. Even in common law states, spouses can be held liable for the deceased's debts for necessities such as food and medical care. If the estate can't pay, this sort of debt may be laid on the spouse's shoulders.
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