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I think you can have power of attorney without actually having your name on accounts. This allows you to distribute assets without personally being liable for a parents debts.
I believe if a bill is in your name only, your wife is not responsible for paying it. But, that doesn't mean it won't cost her. Your estate would then be responsible for paying all your bills. I'm not sure if anything you own in both your names would be at risk, but anything in just your name would be divided up before your wife gets her portion.
Oh. I see what you are saying...
..they can go after other things that "the deceased" had in his/her name.
So if the widowed has things they could be fighting with the cc from getting some of the things that were co/owned together.
you're right, I am so paranoid about my credit. I won't even co-sign for anyone, much less family. It's just too important to me. If I had to, I can help and financially contribute if she needed me to, but I don't want my name on any of her accounts or bills. It's better for my peace of mind!
Quote:
Originally Posted by 2mares
Sportsfan
That makes good sense then. Sorry you have that situation. Im trying to protect my credit thru this divorce form the stbx. It sucks that someone else being irresponsible can ruin your credit.
..they can go after other things that "the deceased" had in his/her name.
So if the widowed has things they could be fighting with the cc from getting some of the things that were co/owned together.
Right?
Sure. Because if you own a house together, the estate of the deceased has half the equity in the house. And the credit card companies have legitimate claim on their fair share of the estate's assets. Until those debts are fully settled, the survivor is going to have to contend with this.
All in all, I'm seeing a lot of convoluted attempts to wiggle out of debt here. It just ain't gonna work. The only way to destroy debt is to either pay it off or declare bankruptcy.
The lesson for all this? Buy a really good term life insurance policy for both you and your spouse. If people would just spend the $30 bucks a month for a decent policy, none of these headaches would happen after a spouse dies. With the life insurance payment, just pay off the remaining debt and close the estate, and have plenty left over to start life over.
My father, an architect, who should have known better, dropped dead with nothing more than a lousy $10,000 policy. I had to work a second job for a couple of years just to help my mother stay afloat until she could get back on her feet. It still ticks me off that he was too lazy and inconsiderate to think of his wife's financial security. I mean, I have enough coverage to wipe out all our debts and give Mrs. CPG income for 7-8 years. It just doesn't cost that much money.
What if it's an unmarried couple living together as if they were married?
Again, a creditor cannot legally hold another responsible for a debt they didn't authorize. If it is a joint account or involves a mutual child, then both parties are responsible. If it is a personal account, the debt can't carry over to another person. The estate would be responsible and it is the creditors responsibility to file a claim against the estate.
That said (and this was mentioned by another person), if an asset is jointly owned, a creditor can attach a lien against the asset to ensure the debt is paid off despite the asset being jointly held but another person.
A creditor cannot hold a spouse / SO / partner responsible for a bill they did not sign for. If a creditor does attempt to collect from the spouse, that creditors responsibility to provide proof that the spouse authorized the debt creation (BUT - the spouse would have to request proof per FDCPA). If the creditor cannot supply proof that the spouse authorized the debt, then the creditor cannot hold the spouse liable. Again, bills created for children are the exception to this.
All in all, I'm seeing a lot of convoluted attempts to wiggle out of debt here. It just ain't gonna work. The only way to destroy debt is to either pay it off or declare bankruptcy.
Even declaring bankruptcy doesn't gaurantee that debts go away now because of how many changes that were recently made in the laws.
Planning ahead is the best action any spouse / SO can take. We have mediocre life insurance policies right now, but we're looking at upgrading them this year. He works in an occupation that he could get killed on the job, never know what will happen. We have enough financial responsibilities that neither of us could live well should something happen to the other.
Sorry about your mom ... that definitely was not fair of your dad.
Sure. Because if you own a house together, the estate of the deceased has half the equity in the house. And the credit card companies have legitimate claim on their fair share of the estate's assets. Until those debts are fully settled, the survivor is going to have to contend with this.
All in all, I'm seeing a lot of convoluted attempts to wiggle out of debt here. It just ain't gonna work. The only way to destroy debt is to either pay it off or declare bankruptcy.
The lesson for all this? Buy a really good term life insurance policy for both you and your spouse. If people would just spend the $30 bucks a month for a decent policy, none of these headaches would happen after a spouse dies. With the life insurance payment, just pay off the remaining debt and close the estate, and have plenty left over to start life over.
My father, an architect, who should have known better, dropped dead with nothing more than a lousy $10,000 policy. I had to work a second job for a couple of years just to help my mother stay afloat until she could get back on her feet. It still ticks me off that he was too lazy and inconsiderate to think of his wife's financial security. I mean, I have enough coverage to wipe out all our debts and give Mrs. CPG income for 7-8 years. It just doesn't cost that much money.
Yeah.
You've heard the phrase, "I'm worth more dead than alive." That's me.
I keep it enough to pay everything off and help the fam start over but that's it.
I don't want to get any ideas in the Mrs. head if I get too much insurance. LOL!!!
The specifics may vary from state to state, but I always thought the estate of the deceased is responsible for all bills and the spouse is not responsible unless they were on a joint account. Now, assets may have to be sold to pay off those debts....but I'm not sure how that works for the other spouse if they are both owners of the home. I'm sure someone will come along who knows how the courts handle these cases.
This is really a good question that we should ALL know the answer to! Thanks for bringing up the topic.
I worked for an estate planning attorney, and this answer is correct. The estate of the decedent usually pays for the debts owed. If there are joint accounts involved then usually the account is listed as a one-half percentage asset of the total value. (meaning, if you have a joint account with 20k in it, 10k of the 20k would be an asset of your husband's estate).
Sure. Because if you own a house together, the estate of the deceased has half the equity in the house. And the credit card companies have legitimate claim on their fair share of the estate's assets. Until those debts are fully settled, the survivor is going to have to contend with this.
The lesson for all this? Buy a really good term life insurance policy for both you and your spouse. If people would just spend the $30 bucks a month for a decent policy, none of these headaches would happen after a spouse dies. With the life insurance payment, just pay off the remaining debt and close the estate, and have plenty left over to start life over.
Cpg is 100% correct...and I say this as someone who was widowed in her 30's with 2 small children. The debts of the deceased do not just disappear, they are paid out of the estate.
On the subject of insurance, buy TERM, not whole life. Your insurance salesperson will give you a million reasons to buy whole life (it's a good investment, blah blah blah), but stick to your guns. (They want you to buy whole life because THEY make a much bigger commission vs. selling term.)
Insurance is meant to protect the people who depend on you, in the event that you die. Go to the library and do some research. Figure out how much money your spouse will need if something happens to you. (I know that Consumer Reports has done articles on this, including worksheets to estimate your expenses.) If there are minor children involved, your family will probably receive Social Security survivor benefits, so factor this into the equation.
Don't let what happened to Cpg's family happen to you.
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