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Death, divorce & debt may be linked in community property states

Most of the 50 states are not community property states. However, the nine states that do bear this distinction, including Texas, are unique when it comes to the issue of a former spouse's death. No matter at what age a Houston resident divorces, he or she could potentially have to confront a deceased spouse's debt long after the end of their marriage.

During the property division aspect of divorce in community property states, all marital property is potentially subject to division between each spouse. This is because these states treat all property acquired after the wedding but prior to legal separation to belong equally to both the husband and wife. There are a few exceptions to this general rule, but otherwise the property division process is apt to be a comprehensive one.

Community property in Texas includes assets, such as homes and vehicles, but it also includes debt. One consequence is that if a former spouse passes away, that person's ex-husband or ex-wife could be liable for certain debts. Agreements formed between two spouses and a creditor are maintained despite the contents of a divorce agreement; spouses generally must make any changes directly with the creditor.

Even if a divorce agreement explicitly spells out the responsibility of the deceased spouse for a debt, that can still be essentially overriden by the original agreement with a creditor. One recourse for the surviving spouse is to file a claim against the estate of their former husband or wife. Prior to divorcing, spouses can contact the creditor and enter into an accord and satisfaction, or novation, and avoid the liability for debt belonging to an ex.

Nowadays, divorced spouses may carry all different types of debt. Some may have credit card debt to pay off, auto loans, student loans or tax debt owed to the IRS. Due to the amount and variety of debt that Texans may have, it's important to get the proper legal guidance on divorce legal issues in a community property state.

Source: KXLY Spokane, "Your dead spouse's debt can be your problem," Jeanne Sahadi, June 25, 2014

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Attorney Christine K. Lincoln

Christine K. Lincoln offers sound counsel and legal services to protect clients and their families facing divorce and other family disputes.

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