Am I responsible for the unsecured credit card debt of my deceased spouse?
Full Question:
Answer:
When a person dies, their assets are distributed in the probate process. If a person dies with a will, an executor is named to handle the distribution of the estate. If the person dies without a will, the court appoints an administrator to distribute the decedent's assets according to the state's laws of intestacy. In cases where the decedent didn't own property valued at more than a certain amount, which varies by state, the estate may go through a small estate administration process, rather than the formal probate process. The court will issue letters testamentary or letters of administration, giving the executor or administrator authority to collect the assets and pay the debts of the decedent. In order to issue letters of administration or letters testamentary a petition to probate the estate is filed.
A deceased's debts should be paid with the property in their estate (the property left at their death). A spouse doesn't typically inherit the other spouse's debts unless they created a co-signor/guarantor/surety/joint account relationship to the debt, so that the spouse's name is on the debt also, and it isn't a separate debt. Spouses will generally only be liable for a separate debt of the deceased if they live in a community proerty 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.
Only after the debts are paid will the remaining assets be distributed among the beneficiaries of the will. Be advised that when a beneficiary inherits property that is collateral for a debt -- for example, a car that is not paid for or a house with a mortgage -- the debt comes with the property. If there is insufficient money or assets to pay all creditors, then the estate must be divided up as equally as possible, with secured creditors receiving priority. This means that if the deceased person died with little or no money in their accounts and didn't own a home, unsecured debt, such as credit card debt will not be paid to the creditors.
The following are PA statutes:
20 Pa.C.S.A. § 3392. Classification and order of payment
If the applicable assets of the estate are insufficient to
pay all proper charges and claims in full, the personal
representative, subject to any preference given by law to
claims due the United States, shall pay them in the following
order, without priority as between claims of the same class:
(1) The costs of administration.
(2) The family exemption.
(3) The costs of the decedent's funeral and burial, and the
costs of medicines furnished to him within six months of his
death, of medical or nursing services performed for him
within that time, of hospital services including maintenance
provided him within that time, of services provided under
the medical assistance program provided within that time and
of services performed for him by any of his employees within
that time.
(4) The cost of a gravemarker.
(5) Rents for the occupancy of the decedent's residence for
six months immediately prior to his death.
(5.1) Claims by the Commonwealth and the political
subdivisions of the Commonwealth.
(6) All other claims.
20 Pa.C.S.A. § 3532. At risk of personal representative
(a) Rights of claimants against personal representatives. — A
personal representative, at his own risk and without the filing, audit or
confirmation of his account, may distribute real or personal property and
such distribution shall be without liability to any claimant against the
decedent, unless the claim of such claimant is known to the personal
representative within one year after the first complete advertisement of
the grant of letters to such personal representative or thereafter but
prior to such distribution.
(b) Rights of claimants against distributed property. —
(1) Personal property. — No claimant shall have any claim against
personal property distributed by a personal representative at his own risk
pursuant to subsection (a), unless the claim of such claimant is known to
the personal representative within one year after the first complete
advertisement of the grant of letters or thereafter but prior to such
distribution.
(2) Real property. No claimant shall have any claim against real
property conveyed by a personal representative in distribution at his own
risk pursuant to subsection (a) hereof, unless such claimant, within one
year after the decedent's death, files a written notice of his claim with
the clerk. Such claim against real property shall expire at the end of
five years after the decedent's death, unless within that time the
personal representative files an account or the claimant files a petition
to compel an accounting.
(3) Liens and charges existing at death. Nothing in this section shall
be construed as affecting any lien or charge which existed at the time of
the decedent's death on his real or personal property.
(b.1) Limitation on rights of claimants. — A personal
representative may make written demand by mail or delivery to any person
who may have a claim but who has not previously given written notice of
his claim to the personal representative. If the personal
representative's demand requests the person to give written notice of his
claim within 60 days from the mailing or delivery of the demand or within
one year from the first complete advertisement of the grant of letters,
whichever is later, and the person fails to do so, the person shall not
have any rights with respect to such claim under subsection (a) or (b)(1)
and shall not have any right on account of such claim to receive notice
of the filing of the personal representative's account and of its call
for audit or confirmation. The personal representative shall not be
liable to any such person or to any beneficiary, heir or next of kin or
creditor of the estate for making or failing to make demand under this
subsection.
(c) Record of risk distributions. — The personal representative
may file with the clerk receipts, releases and refunding agreements which
he may have received from persons to whom he has made a risk
distribution, or from other parties in interest. Receipts, releases and
refunding agreements so filed shall be indexed under the name of the
estate. Their acceptance shall not be construed as court approval of any
act of administration or distribution therein reflected.
