Your Spouse’s Debts after they Die

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What Happens to Your Spouse’s Death after their Death? 

Part 1 of a 2-Part Series

A spouse’s death creates a difficult and demanding time for the surviving partner. As much as one prefers space and time alone to process your grief, they maintain responsibilities related to settling their deceased spouse’s affairs, including paying off their spouse’s debts. 

American Debt

Most Americans incur debt. The obligation to repay does not necessarily disappear when a spouse dies. Although the estate pays most debts, sometimes, the survivor may need to repay their deceased spouse’s debts

Spouse’s Debts

If the legal duty to repay a spouse’s debt falls to you, this may impact your own finances. Therefore, be clear about the laws where you live. In case debt collectors contact you, make sure you understand your rights. Discuss questions about debt payment obligations and rights with an attorney who specializes in estate planning and administration. 

Debtor Nation

About 80 percent of Americans carry some type of debt. This includes credit cards and student loans as well as mortgage debt and personal loans. An estimated 13 percent of Americans with debt do not expect to pay it off during their lifetimes. 

Spouse’s Debts as Americans Age

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The average American maintains more than $90,000 of debt. In fact, collectively, Americans owe $14 trillion. More than half of this amount is mortgage debt. More surprising, however, 45-55-year-olds hold the greatest average debt. While Gen Xers keep the largest average debt balance ($135,000), Baby Boomers hold the next-largest debt load (nearly $100,000). Members of the Silent Generation (75 and over) owe about half as much as the average Millennial. In short, debt does not discriminate by age. Even as people near the end of life, they struggle financially. Finally, when a debtor passes away, questions arise for their surviving loved ones. 

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Probate and Spouse’s Debts

Before we delve into a surviving spouse’s possible debt obligations, consider the way estates handle debt after death. The legal process for distributing a person’s property after they die refers to probate. During probate, the estate distributes assets according to the person’s will. First, however:

  • The estate pays debts.
  • The court passes remaining assets to heirs or beneficiaries. 
  • Probate does not apply to assets such as life insurance policies and other accounts with a named beneficiary, assets in trust, and jointly owned property. 
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Check back next week, when we conclude this two—part series about what happens to your spouse’s debts when they die.

About Skvarna Law Firm in Glendora and Upland, California

A skilled attorney can assist with your estate plan. Contact us today to learn about your options (909) 608-7671. We operate offices in Glendora and Upland, California. We provide legal services for individuals living in San Bernardino, Los Angeles, Orange and Riverside Counties. This includes the cities of Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Montclair, Pomona, La Verne, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.