The Debt Left Behind by a Spouse

/ November 4, 2013

Blank Notebook & Calculator - iStockAs discussed in a previous post, preparing for a death of a spouse can be extremely difficult and nearly unbearable to even think about. However, it is important to understand the financial impacts so that, if and when the time comes, the surviving spouse is equipped with the right information and is organized. This preparation is important in variety of aspects of married life, but especially important to consider when the couple, or just one of the spouses, has debt.  Simply because a credit card is in one spouse’s name alone, or only because one spouse receives medical treatment, does not mean that when that spouse dies, the surviving spouse will not need to consider debt left behind.

Community Property States

For example, in a community property state, debts incurred during marriage are generally considered community debts and the surviving spouse may be responsible for the debt incurred by the decedent spouse. Community property states are Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.


In Minnesota, which is not a community property state, a husband and wife that are living together will not be liable to a creditor for debts of the other, except on debts incurred by one spouse:

  1. If the other spouse was a co-signer for the other
  2. On necessary household articles and supplies furnished to and used by the family
  3. For necessary medical expenses, including those received from Medical Assistance

Dr with clip board - iStockThis means, for instance, for medical expenses received by a spouse, who then dies, the surviving spouse will be responsible for paying any balance owed to the medical provider once insurance, if any, has been applied.

What to Do

Oftentimes, the surviving spouse may be able to negotiate with the creditor. If the creditor agrees to accept a lower payment, the surviving spouse should get that in writing to avoid any misunderstandings in the future. That said, if a portion of the debt is forgiven, the surviving spouse could be subject to federal income tax on the canceled debt.

As always, it is best to seek the advice of a licensed attorney or other financial professional in your area to properly assess what the surviving spouse will be responsible for and how to go about handling those debts.

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