At the time of the death of a spouse, separate property is classified as either:
Separate property of the decedent – This property will always be liable for the debts of the deceased; or
Separate property of the surviving spouse – The separate property belonging to a surviving spouse is not normally subject to the debts of the deceased spouse unless liability is established by other rules of law.
Community property may be divided into three separate classifications as follows:
Deceased Spouse’s Special Community – This property is community property which was subject to the deceased spouse’s sole management and control is liable for debts incurred by the deceased spouse.
Surviving Spouse’s Special Community – This property is community property which was subject to the surviving spouse’s sole management and control. It is not liable for separate liabilities of the deceased spouse incurred before marriage or for non-tortious liability that the deceased spouse incurred during the marriage, unless both spouses have been made personally liable by particular acts. Those acts include liability incurred when the deceased spouse was acting as the agent of the surviving spouse or when the deceased spouse incurred a debt for “necessaries” as are described by statute. For example, a surviving spouse’s special community might be liable for debts incurred to care for or improve the community, but it probably will not be liable for the debt incurred for some type of personal use that provided no benefit to the community. These “necessaries” are more fully documented by statute.
Joint community property is that property which was under the joint management of both the decedent and the surviving spouse. This property will be subject to liability claim against the estate of the deceased spouse.
There are three specific constitutional and statutory protections which are further offered to a surviving spouse and are as follows:
The Texas Constitution continues to exempt the homestead from claims of Decedent’s creditors. The surviving spouse is given an exclusive right to occupy the homestead so long as he/she elects to do so, even if the homestead is the separate property of the deceased spouse.
Exempt personal property, including furnishings, automobiles and personal effects in an amount that does not exceed $60,000.00, may be protected from creditors of the deceased.
Family allowances may be granted in addition to the homestead and personal property exemptions. This allowance is paid out of the decedent’s property and may be established by the probate court for one year’s maintenance of the surviving spouse and, if applicable, minor children. This amount of a family allowance is set at the discretion of the probate court, but should not be allowed if the surviving spouse has a sufficient separate estate to pay those living expenses.
It should also be noted that careful notification of creditors pursuant to statute may reduce the overall debt burden by taking advantage of statutory shortening of statutes of limitations for creditors to act.
Obviously, when a spouse dies leaving a large number of debts, there can be serious consequences, but these concerns can be addressed, and many times the seriousness of the consequences can be avoided by working closely with an attorney of your choosing who is familiar with these subjects.
While the insurance may be exempt from payment of the debt. If you risk loosing substantial community property or separate property to pay the debt you may find that you have to pay the debt off even if the life insurance is protected.
I cannot provide you with legal advise. I have provided you with information about the law related to your question. My answer, and any information that you find online, should not take the place of having a consultation with a lawyer in your area to advise you regarding your specific issues.
Please show your appreciation for my candid, accurate information by clicking VERY INFORMATIVE, OR the OR and positive feedback. You should only rate me if you are satisfied with the information I provided you. If you cannot rate me GREAT please do not rate. Give me a chance to make it right by clicking REPLY TO EXPERT.
I appreciate your question and repeat customers. You can request me by beginning your question with "Dear XXXXX..."
Thank you. My attorney couldn't answer this question until he did more case law study related to statute changes several years ago.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).