Q: My father passed away last year. My
mother, who was on Medicaid, passed away in January. My father had credit cards
which only he signed for. We've been getting letters from the credit card
companies, saying that they'll settle for 80% of the bill. What should we do? --SD, via email
A: Don't pay anything unless they can show
that your mother co-signed for the credit cards.
Bereaved survivors very often assume that they are legally obligated to pay the debts of their deceased relative -- a mistaken assumption that is often shamelessly encouraged by creditors, as your experience shows.
In fact, however, any legitimate debts incurred by your late mother
must be paid by her estate – the assets she left when she died. Although that might result in a smaller legacy for you and your siblings, you have no legal obligation to dig into your own pockets to pay her debts.
(And as I've explained in earlier posts, creditors don't get a crack at everything a decedent leaves. They cannot recover their money from assets with named beneficiaries, like Individual Retirement Accounts or 401(k) accounts, or from life insurance policies, for example, or from assets that were owned jointly with someone else. Accounts with named beneficiaries go to those beneficiaries, and jointly-owned assets go to the surviving joint owners.)
But if your mother
didn't co-sign for your father’s credit cards, her estate doesn't owe these card
issuers anything at all.
It is true that by state law, spouses are
legally responsible to pay for each other's ‘necessities’. That means that the extent that your father's credit card debts were for food, clothing, shelter or medical
bills, the card issuers can argue that your mother's estate is liable
for them.
"If so, let them make that argument in
Surrogate's Court," says Silverberg. "I doubt they'll show up."
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