“Dear Steve,
Dad recently passed away. He had one credit card in his name, with mom as an authorized user. Balance on the card is approx 10K. They live in WA state, which is generally a community property state, however they legally disolved the community property agreement and all assets were put in moms name months ago in case she passed first. All assets would then go in a trust for his nursing home care. He has no assets whatsoever. She is living on social security and cannot afford to pay this bill.
Is mom responsible for the credit card bill? What does she need to send to the credit card company? What should she tell them?”
First off, I’m so sorry to hear about the loss of your father. These are trying times indeed.
My mother just passed away last year so the emotions of the loss and having to deal with similar issues, hit home for me as well.
The good news here is there is a process to deal with such situations. Since your mother was only an authorized user she is not responsible for the debt. But we need to make sure the creditor is informed of your fathers passing as soon as possible.
There are several ways a creditor is notified of the death of a responsible party. In the case of my mother the funeral home notified Social Security she had passed and within a week her credit card had been cancelled by the bank before we could notify them. Apparently some banks monitor the Social Security death index. Smart.
I previously wrote How to Handle the Bills After the Death of a Loved One that lays out a number of steps to take.
But in this case, if you know there was only one credit card, I think I can help simplify it for you.
To make sure this is dealt with quickly and comprehensively I would suggest you send a letter to the creditor by some sort of traceable means to prove delivery and include:
- An original copy of the certified death certificate.
- A copy of the last monthly statement.
- A letter explaining your father passed away, the cards have been destroyed, and the account should be closed.
Typically this will deal with the account and it will be closed.
Most importantly, your mother should NOT use that credit card at all, any more.
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UPDATE: The bank was notified via Social Security before we were able to get ahold of them. They send us an Estate Recovery Form. I called them told them that there was no estate and they said to go ahead and write that at the top of the form and mail it back in. They would do their research. After a few months, we had not heard anything so I called back and was told that since Dad was the account holder, Mom was not responsible for the balance. The bank wrote it off. They told me Mom would receive a 1099C for her 2013 taxes and she will have to pay tax on the forgiven amount. May not be an issue for her at all since her income is very low. Thank you Steve for helping with this issue!
Great news. Bus I doubt Mom will be responsible.
I would not supply the paper work, because you just indicated it was dissolved a couple months ago, and not prior to the account being opened. having it dissolved after the account was opened still leaves the parent responsible. Frankly, bank’s probate department may notice this, as your not the only one who has tried this.
I believe Steve may be incorrect since WA is a community property estate, unless community agreement was dissolved before the account was opened. That being said, most creditors I do not believe go after someone who is not listed as a responsible party.
They did say, “however they legally disolved the community property agreement.”
Yes, the community property agreement was disolved several months ago. Should we include a copy of the legal paperwork that shows it was disolved when we send them the letter? Is that even necessary? I am worried they will come after her with nasty calls trying to get her to pay.
My gut reaction is you don’t need to provide more information than necessary in this case. I’d send the first information by traceable means and if they come back and want to know more, well then you can supply additional documentation.
Sometimes, less is more.