Monthly Archives: November 2012

Do I Have To Pay My Husbands Debts

Do I Have To Pay My Husbands Debts after death?

Probate Question:

Do I have to pay my husbands debts?

My husband has died and he had a life insurance policy to pay off the mortgage, but the insurance company won’t pay out until I have paid off his credit card, which was nothing to do with me.   Why should I have to pay his debts?

Probate Answer:

When someone dies, their debts must be paid off first if there are any assets.  In this case there seem to be at least two assets, the house (or his share of it) and the life insurance policy.

In the past, mortgage life insurance policies tended to be “assigned” to the lender, which meant that the lender “owned” them to the extent that there was any mortgage outstanding.   Anything above that (or if the mortgage had been paid off) would belong to the estate of the person who had died.

In these circumstances, the house could be sold to pay off the debt (even though it is relatively small) if it can’t be paid off otherwise, so the insurance company are insisting that the debt is paid off first, to avoid much worse – and more expensive – problems if the creditor took action against the person managing the estate (the wife or executors).

My advice, as you don’t have the money, is to ask the insurance company to take the debt out of the death benefit and send you the balance.  I’m afraid you can’t avoid paying the debt if there are assets, even though you would otherwise have no personal liability.  As the person managing your husbands estate, you must ensure that all debts are paid off if there are assets to pay them – even if it is far from convenient.

However, if you husband had no assets, you could just write to the creditors and advise them of the fact.  But in the circumstances, a swift check by the creditors would show if this was genuine or man attempt at fraud!

Do I Have To Pay My Husbands Debts.