Chase Payment Protector Plan (funds, taxes, debts, credit)

[supestacey]

Hello everyone.

Hopefully someone can help and I thank you in advance for any insight provided.

• My wife has two Chase credit cards accounts and both issue cards in both our names. Neither is a joint account as I was added as an authorized user only a few years ago.
• My wife has late stage Alzheimer's and I plan on placing her in a private care facility soon.
• Presently the balance on the credit cards is paid in full every month but I expect the amount owing to climb pretty fast from here on out due to the extra costs involved in paying for her end-of-life care.
• I also plan on buying a small fifth wheel trailer to live in as I won't be able to carry the condo we presently reside in, once she is placed in a care facility
• Again, the funds for the trailer will come from the credit cards.

I would like to opt-in/purchase debt cancellation insurance to have the balance cancelled upon her death, but have the following questions:

By residing in CA, and it being a community property state, will I be liable for half of the card balance owing when she dies (after the 90-day waiting period)?
Or will the debt be cancelled in full with no responsibility on my part even though I will be the user who will be signing for/purchasing everything from here on out?

Upon her death, as I am the sole beneficiary/trustee/executor of our joint trust and there will be no probate upon death,. Will I (or the trust) be liable for any taxes owed, if a 1099-c is issued for the debt cancellation?

Is there anything else I should be aware of before activating the Payment Protector Plan for the specific intent to use it for balance cancellation?

Here is a link to the Terms and Conditions.

[URL]http://www.knowzy.com/Personal_Finance/Credit/Credit_Cards/Payment_Protection_Plans/Chase_Payment_Protection-Terms_of_Service.txt[/URL]

I think only section 11 applies to "Death".


Thank You again, for any assistance.

[KayAnn246]

I listen to Dave Ramsey everyday so I will try to explain how it works. I am sorry you are facing this difficult situation.

The debt is not forgiven or written off except for student loans. Spouses or other relatives are not responsible for the decedent's debt automatically but the estate distributes the assets of your spouse. But before the assets can be distributed to anyone, all debts must be paid by the executors.
After the debts are paid from with the remaining assets such as a house or car, the remaining assets will go to any beneficiaries.

Now if there are no assets Chase can not collect the debt from other family members or children. In some states the creditor can not collect from the spouse either. But in a community property state it gets more complex. In a community state, the spouse is responsible. I would suggest you consult a attorney before you go ahead so you will have all your ducks in a row since estate law is very detailed, complex and laws can change.

I found a few articles that make help explain it more.

What Happens to Debt After Death? - Estate Planning - Law and Daily Life

What Happens to Credit Card Debt After Death?

What to Do After My Spouse Died & Left Me Credit Card Bills I Didn't Know About | eHow.com

[supestacey]

Singlelady10,

Thank-you so much for the in-depth reply. It really is much appreciated. I will take the time later today to read through all the articles/links that you provided.

As you suggested, I will also talk to a lawyer (and Chase themselves) for more information too.

May take me a few days, but I will post back with my findings just incase someone else is curious as to the "answer".

Thanks again!!!!!