Fox Business News recently ran an interesting question from a viewer named David. He asked whether an authorized user on a credit card (as distinct from a joint credit card holder) is responsible for all charges incurred if the cardholder passes away. The article correctly pointed out that being an authorized user doesn’t mean that you are responsible for the charges incurred. However, in community property states such as California, if the authorized user is also married to the cardholder, the spouse is responsible for paying half the charges if the couple divorces.
Community property is a set of rules that exist in only a handful of states. Under these rules, everything earned or purchased during the course of a marriage is legally the property of both spouses. Even pensions and 401K plans are included (though only the money added during the marriage). However, what some people may not realize is that community property also applies to debts. If you and your spouse individually incurred debts during the course of your marriage, you are generally both responsible for paying them off following dissolution of the marriage.
When you get divorced in California, it can be difficult to prove what community property is and what property you possessed before the marriage is, or what you received as a gift during your marriage. Protecting your own assets, as well as your rights to any assets your spouse may claim, can be difficult unless you hire a qualified family law attorney who can fight for your rights. This is especially important when substantial estates or debts are involved in the divorce proceedings.
Posted in Divorce