‘My father has been lying about his finances. He owes a lot of money’: He’s not in good health. Will my mother be responsible when he dies?

He does own several properties, but they’re not selling given how terrible the housing market is at the moment and, even if they do sell, they won’t be enough to cover what he owes. He’s also older and not very healthy. 

My siblings and I are worried about the burden on my mother if something were to happen to him. They’re still married. 

To what extent would she be responsible for his debts? 

Concerned Son

Related: ‘He implied he was financially secure’: My husband was always hesitant about his finances. Now I know why.

Dear Concerned,

Financial infidelity, by some accounts, can be as devastating as any other kind of infidelity. It can threaten not only a couple’s marriage, but also their home, peace of mind, financial independence, reputation, credit score and even their ability to retire. It’s devastating to put someone’s future in jeopardy by keeping secrets like this. Nearly one-third of people have said they’ve committed financial infidelity — that is, deliberately keeping secrets about money from their partner — but over half have said they have financial secrets, like a secret bank account. 

The Federal Trade Commission and Consumer Financial Protection Bureau say that a surviving spouse is not liable for credit-card debt, student debt or other kinds of debt owed by a partner who dies. The contract is between your father and the credit-card company. However, in a community-property state, your mother may be liable for certain debts, such as medical debt, from jointly held assets. There are nine community-property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. 

What kind of debt your mother may be on the hook for will depend on whether she lives in one of those community-property states, the nature of the debt and the laws in her particular state. “The debt of a deceased person is paid from their estate, which is simply the sum of all the assets they owned at death,” Experian says. “If [the] spouse had a will, the executor they named in the will uses the estate to pay off creditors. If [the] spouse didn’t have a will, a probate court judge will decide how to distribute their estate and will choose an administrator.”

Related: ‘I’m afraid to tell my spouse’: I maxed out my credit cards and racked up $100,000 in debt due to my gambling addiction. Can you help?

If your mother was a co-signer on those debts, she certainly would have liability, says Gary Botwinick, a co-managing partner of Einhorn Barbarito, which has offices in New Jersey. If they got divorced, she may also be on the hook for his debts — if the judge ruled that she benefited from those debts. “Typically, certain inheritances are not subject to debts,” he says. “If they own a home via tenants by entirety, that would typically not be subject to the debts. A life-insurance death benefit and retirement assets — they too would not typically be subject to those debts.”

When your father dies, your mother can also tell any debt collector how and when to contact her. She should not be bullied or cajoled into paying debts that are not her responsibility and, even if they were her debts, there are rules as to how debt collectors must conduct their business. The days of being psychologically beaten into submission are over. “If you receive a validation notice and dispute the debt in writing within 30 days, the debt collector must stop contacting you until they validate the debt in writing,” the Consumer Financial Protection Bureau says.

Both partners should always have access to bank accounts and know where money is being spent and why. If one partner has a gambling problem, it’s better that it’s discovered before the bank accounts are drained and the person attempts to refinance the house.  That begs the question: How did your father get into such debt? Does he have a gambling problem? Is he an over-spender? Or has he been the victim of an elder financial scam? Will he continue to rack up debts, even though the extent of his financial folly has been revealed?

Meanwhile, interest rates won’t stay near 8% forever, and the housing market will eventually pick up when more people feel comfortable about buying. Potential sellers, who need to buy another home with a mortgage, obviously don’t want to trade their low rates for a rate that is currently at a 20-year high. Some economists expect rates to fall and demand to rise in 2024, but some also predicted rates would have hit 5% by now. It’s a shame to have to unload these investments and/but your parents’ long-term financial security is paramount.

If your father should die before your mother, she should not simply roll over and get out her checkbook for every debt collector that comes calling. She will likely be scared and vulnerable, so she will need both legal and moral support if that time comes and your father’s estate goes through probate. For what it’s worth, there are certain assets that won’t go through probate: assets jointly held by both spouses, assuming these properties are in both your parents’ names, along with trusts and life-insurance policies.

It’s not a one-size-fits-all answer, I’m afraid. It will depend on the nature of your father’s debts and where they live, but it’s best to prepare now.

You can email The Moneyist with any financial and ethical questions at [email protected], and follow Quentin Fottrell on X, the platform formerly known as Twitter.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

Previous columns by Quentin Fottrell:

My husband and I divorced after 17 years of marriage. He sold our home at a significant profit. Am I entitled to my share?

‘I’ve been living inside a silent divorce’: I want a ‘kitchen-table’ separation from my husband without lawyers. Is that a good idea?

‘I cashed in my retirement account to buy our home’: My husband left me and our two kids and won’t pay the mortgage. What now?