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Handling debts for a surviving spouse after death

Many married couples in Texas may wonder how their debts are handled after death, especially for their surviving spouse. There is often a significant amount of confusion about the liability a surviving spouse may have for any debt accumulated by their partner before their debt. When a person passes away, their debts are paid from their estate; the money and property they leave behind typically pass through probate.

Despite common beliefs, spouses are not automatically responsible for their partner's debts during their life or after their death. The only debts that a spouse is automatically responsible for are joint debts like jointly held credit cards or lines of credit. However, there can still be a significant cost to a surviving spouse, especially if they are to inherit the bulk of their partner's estate. If the funds in the estate must be used to satisfy debts, they might never be received by the surviving spouse.

In general, non-probate items like joint bank accounts, homes owned through joint tenancy or life insurance policies pass immediately to the spouse rather than going to the estate and being subject to creditors. For funds that are held in the estate, laws govern the priority order in which debts must be handled during the probate and estate administration process. Most commonly, burial and funeral costs must first be paid from the estate left behind, followed by medical bills and federal and state taxes.

For people who are dealing with debt and want to plan for their future, estate planning can be a key tool. An estate planning attorney may work with a person to set up key documents like wills, trusts and powers of attorney as well as advising on the use of non-probate transfers and other forms of transfer in order to protect a person's assets.

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