California Spouses & Liability for Debts

It’s known that for most spouses in California, you might be planning to leave a substantial portion of your assets or estate to your spouse. But what about the other end of the spectrum when it comes to debts or liabilities? Are spouses responsible?

California is what’s known as a community property state. This might need to be factored into your overall estate plan. Ownership interests of married spouses are categorized as either the spouse’s own separate property or the couple’s joint community property.

Assets that are acquired while the couple is still married and are living together in California are typically classified as community property assets and those assets acquired prior to the marriage or given as gifts during the marriage are seen as separate property, unless these are otherwise comingled. While both spouses are still alive, community property assets are generally liable for the debts of either spouse incurred either during or before the marriage.

This is true even if only one of the spouses is party to the judgement or the debt. There are two key exceptions to this. The first is when a married person puts their earnings earned during a marriage into a separate bank account that their spouse cannot access and second, that the debts of the deceased person’s last illness or funeral are chargeable against the deceased spouse’s own estate.

For complicated issues associated with the management of any debts or other assets inside your estate, it’s good to have a relationship with an estate planning lawyer in Pasadena who can guide you through this process and help answer many of your most common questions.

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