If my husband dies and I am not the benifitiary do I have to pay off all of his debt?

Question

I am not the benifitiary on my husbands life insurance but we are wondering if that means that I will still have to pay all his debt and medical bills.

Answer 1

All the previous answers contain errors.

There is no federal estate tax (and in many states, no state tax) if the total estate is under $2 million.

There is no estate tax on most life insurance policies written in trust (ILIT) or owned by someone other than the deceased. There is no tax on anything inherited by the surviving spouse.

Life insurance is never available (i.e., liable) for payment of debts of the deceased. There might be, in some limited circumstances, a "fraudulent conveyance" issue, in which case recent premiums might be recovered. That is rare.

If the spouse is liable for the debts for other reasons (liability for "necessaries" (a term of art) for the support of the deceased, or his medical bills) whether she can avoid payment by disclaiming the inheritance or life insurance is a matter of state law and variable. Prof. Adam Hirsch has done considerable research in this field.

The right of creditors, or some of them, to seek payment from you may depend not only on state law as to liability for necessaries and for medical care, but whether you live in a community property state, and whether the community was solvent.

Chances are that you will not have to pay, but that you may be harassed by creditors who do not believe that you didn't inherit a fortune. Assert your rights under the federal Fair Debt Collection Act. Get Caller ID. Keep a diary. Tell callers that you are recording the call (if you have a telephone answering machine you may be able to do so, but even if you don't, telling them that makes them mind their language). If a lawyer is handling the estate refer callers to him or her.

On the income tax issue: if there is income tax due you should probably not file a joint return. If there is a tax refund, some of it may be attributable to the estate. Applying it to "future taxes" may finesse the issue, although legally the part attributable to the estate could be claimed by creditors. Consult with your tax advisor.

Only in Civil Law countries (like France, not Louisiana) do heirs "inherit" debts. And then only if they fail to disclaim the estate. In the U.S., an insolvent estate cannot seek a bankruptcy discharge (unless the decedent filed prior to death) and insolvent estates are dealt with under state law, different in every state and territory.

My condolences and my best wishes for happier times.

Answer 2

I regretfully must disagree STRONGLY with Zahbudar. The government doesn't indiscriminately take 50 percent of an estate if there is no will. An escheat (government takes proceeds) only occurs when a person dies without a will and there is absolutely no relative that can take by distribution.

First, the estate of the decedent (dead person) does indeed have to pay not only taxes but also all other expenses and liabilities in his name, with little exception. The beneficiary of life insurance proceesd takes subject to federal and state gift and estate taxes (which vary from state to state. Under the federal law, the estate tax applies when the lifetime benefits given by the insured exceeds a very high amount (over $2.0 million or so).

Husband MUST execute a will and include an "abatement" provision. This specifies the order for which the estate's liabilities and taxes are to be paid.

Another option is to create a spendthrift trust. A spendthrift trust is a trust that is created for the benefit of a person that gives an independent trustee full authority to make decisions as to how the trust funds may be spent for the benefit of the beneficiary. Creditors of the beneficiary generally can not reach the funds in the trust, and the funds are not actually under the control of the beneficiary.

Clearly these are serious questions that an estate planning attorney should assist with. But this is a start. Good luck!

Answer 3

If you are his wife you will have to do exactly that.

I suggest that the first thing you do is have him write out a Last Will and Testament. That document will need to be signed by three witnesses, and notarized. Without a will in most localities the proceeds from the liquidation of all of your husband's holdings will be split 50-50 with the government and you. You can cut down the government's share by a huge percentage if he leaves a valid will.

You can also contact your life insurance company and have the insurance policy beneficiary changed to "your husband's estate". The will takes over there and stipulates what is to be done and to whom. Make suitable provisions for payment of his outstanding debts and burial costs.

Zah

Answer 4

that's extremely not an trouble-free question, because of the fact the variety of debt and the state additionally count. I hate it while human beings supply uninformed solutions. And, that's why we constantly ought to make it easier to know to work out an lawyer on your state. There are community assets states, consisting of Texas and perhaps CA, perhaps others. they are distinctive from states the place a husband and spouse own assets one after the other. i understand some years in the past, my ex-spouse died in Florida, owing perhaps $20,000 in credit card debt. the business enterprise in simple terms wrote it off, and made no attempt to collect from the valuables. That grew to become into one credit card business enterprise, and that grew to become into Florida. It additionally makes a distinction which variety of debt that's. In non-community assets states, an substantial different can often in user-friendly terms be held to blame for ncessities regarding spousal debt. for occasion, undemanding residing fee debt the substantial different may well be compelled to pay, while no longer for luxuries. additionally, as somebody mentioned, in case you had joint bills, then that's greater possibly you would be predicted to pay because of the fact it is your account. this may well be a appropriate occasion of a nasty thought to purpose to get criminal advice from dummies on the cyber web. no longer in user-friendly terms because of the fact any dummy can answer, such because of the fact the single that mentioned divorce him -- what a jerk! yet, because of the fact even people who could have some information might want lots greater training than you have a tendency to furnish. I assure you in case you visit an lawyer, you will could desire to furnish lots greater information to get an answer of value. of path, a many times used rule is the probate courts first anticipate the deceased guy or woman's assets to pay the deceased guy or woman's expenses earlier they seem at every physique else, and if he has the money in his own call, consequently in his own assets, which could pay expenses earlier every physique gets a cent. additionally, existence coverage generally is in simple terms the valuables of the benificiary, no longer area of the valuables, different than the thieving attorneys get to count type it as area of the valuables while they parent their decrease for criminal expenses. Others look to take this question as pending loss of existence of a ill guy. I extremely tend to view it as a healthful guy who has a tendency to spend lots he would not have, and a spouse who concerns regarding the long term results of that because it impacts her..

Answer 5

Not at all. If you have not inherited anything from the property of your husband, you are not legally bound to pay his debts.

Answer 6

If you file taxes jointly, you do. Start filing separately (but it will cost you more)

Answer 7

shouldnt u want to figure out why your not the beneficary?