Do I Have to Pay a Loan Against a Spouse's 401K in a Divorce?
Full Question:
Answer:
The answer will be a matter of subjective determination for the court based on all the facts involved, such as whether the proceeds of the loans were used for your mutual benefit. Spouses aren’t usually responsible for the other spouse’s debts unless they created a co-signor/guarantor/surety/joint account relationship to the debt. Spouses will generally only be liable for a separate debt of the deceased if they live in a community property state. However, state laws vary about which marriage partner is responsible for certain debts, depending upon when the debt was incurred, the identity of the debtor, or the purpose of the debt. Texas is a so-called "equitable distribution" state. This means that the division of property and debts between the divorcing parties should be fair and equitable, but not necessarily equal. The court has wide discretion in dividing property and debts.
