Hubby worried about sick wife’s loans, debt

Dear Mrs Macaulay,

My wife is ill, and the prognosis doesn’t seem good. In settling some matters for her, I realise that she is deep in credit card debt, and has several loans, some of which I didn’t know about. Will these debts be erased in the event of her demise, or will they come after me and the estate I have built for our children?

I can understand your concern, but there is no reason for you to be troubled about your wife’s debts for her credit card use, and for any loans pursuant to which she alone entered into the contracts. In short, her estate will have to meet all her personal debts. The only time a surviving spouse would become liable for their deceased spouse’s debts, is when they jointly borrowed monies together, or you co-signed with her on an application for a loan, or you signed as a guarantor of any of her loan contracts and she failed to pay.

So you need not worry about having any of her credit card debts becoming your legal or other responsibility to pay off. You should also bear in mind that credit cards generally have an insurance policy attached to the account, and the holder is charged the insurance premiums each month, as the monthly statements should show. Following her death, after the bank or financial institution has collected the insurance money, if there is any balance due, the institution will make a written claim for the balance. Such a claim should be dealt with by the executor(s) named in her will, if she made one, or her administrator(s) if she did not leave a will. Whether it is an executor or administrator of her estate, they must use the proceeds of the net value of her personal assets to pay off her debts, and if she has no assets with any value, or, they are insufficient to clear all her indebtedness, then they would go unpaid.

As to her several loans, again you are not to worry because, as long as you did not co-sign, or you did not sign as a guarantor, you do not have any legal or other responsibility to pay off any of them. The same principle I have stated above, shall also apply to these.

The legal position of the responsibilities of executors and administrators is that they must pay off all taxes and debts due from the deceased spouse before they can settle any assets for the beneficiaries. The Acts which deal with estate matters when pronouncing on any distribution of a deceased person’s assets, generally state the “net assets” , which means that all the taxes owed at the time of death and “all their just debts” have to be paid before any beneficiary can obtain any settlement from the estate.

You have not said anything about whether you yourself own the family home, or both you and your wife are the proprietors of it. If any of these situations apply to you and your wife, under the application of the Property (Rights of Spouses) Act, on your wife’s death, she is entitled to a one-half share of the family home and in such circumstances, such a property may be in jeopardy because her creditors would in these circumstances have a valuable asset of hers to go after for the payments of the debts owed. This may mean that you may have to buy out her one-half share, so that you can save your home by having money in her estate to settle all her debts and then the balance left can be distributed to you as her surviving spouse and any children you and she have.

I must responsibly advise you to open all correspondence addressed to her from anyone or any institution for any payment of any debt, and obtain the services of an attorney-at-law immediately, especially if you jointly own your home or if it is registered in your name only as the legal owner, because of the Act referred to above. Do not just sit on such correspondence. It is better to have these matters dealt with by a lawyer and save yourself from being harassed by frequent demands from those she owes.

You are not personally in law or any practice liable to pay any of your wife’s debts, entered into solely by her, either during her lifetime or after her death. No such creditor can force you to pay them. It may also be a good idea to publish the fact of her death, when it happens.

All the very best, and please accept my sympathy for your wife’s situation.

Margarette May Macaulay is an attorney-at-law, Supreme Court mediator, notary public, and women’s and children’s rights advocate. Send questions via e-mail to allwoman@jamaicaobserver.com. All responses are published. Mrs Macaulay cannot provide private, personal responses.