Am I Responsible for My Husband’s $60K Car Loan if He Dies?
I’m fortunately married (25 years) and retired for medical causes (I’m 58). My husband makes good cash. We’re assembly all of our fundamental wants, however his retirement is severely underfunded.
We needed to dig out of debt not too long ago and are down to at least one zero-interest bank card we nonetheless owe about $18,000 on. Our residence can be paid off in about 4 years, and I ship $300 additional every month.
My husband could be very set on getting an costly new automotive that prices about $60,000. I can’t discuss him out of it, although I’ve tried! He’s OK with working till he’s 70 and would use his outdated automotive because the down cost and put down no more money.
I’m fearful if one thing occurs to him earlier than the brand new automotive is paid off. If he passes away and I’m not a co-signer, will that shield me? I don’t need the automotive, nor do I would like the effort of attempting to promote it ought to he cross. I’m additionally fearful about if he doesn’t cross however wants a long-term facility or nursing residence.
How do I shield myself for my future? He has a number of well being issues, however so do I.
-Mrs. M.
Pricey Mrs. M.,
Your husband could also be approaching retirement age, however he must develop up already. A $60,000 automotive is one thing you purchase when your retirement accounts are plush and you’ve got little if any debt. However I do know I’m preaching to the choir.
To reply your query: The affect on you relies upon largely on what state you reside in. For those who reside in one of many 41 states that observe common-law property guidelines, you wouldn’t be accountable for the debt so long as your identify isn’t on the mortgage. However within the different 9 states that observe group property guidelines — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin — every partner is equally responsible for any debt incurred in the course of the marriage.
In a common-law state, in case your husband died owing cash on the automotive, each the automotive and the mortgage would grow to be a part of his property. The property — particularly, whoever is the property’s executor — can be accountable for making funds out of your husband’s belongings throughout probate.
Do you have to inherit the automotive alongside along with your husband’s different property, you can merely contact the lender and give up it. The lender might nonetheless file a declare towards the property. However since your identify gained’t be on the mortgage, you wouldn’t be sued over the debt. Your credit score rating wouldn’t be affected. You could possibly do the identical factor in case your husband turns into disabled. Doing so would harm his credit score, nevertheless it wouldn’t have an effect on yours.
However for those who reside in a group property state, the lender might sue you for the debt even for those who don’t co-sign. In case your husband doesn’t have satisfactory life insurance coverage and incapacity insurance coverage that will can help you cowl automotive funds, there’s an actual threat to your credit score and funds.
No matter the place you reside, this buy is a horrible thought. Your husband might imagine his plan to work till 70 fixes every little thing. However the actuality is, lots of people are compelled to retire sooner than they deliberate due to medical points or a job loss. That prospect is daunting, particularly given that you simply say his retirement plan is severely underfunded. The cash that your husband can be spending on a automotive cost must go towards catching up on retirement financial savings.
I do know you’ve tried to influence your husband to not make this buy. However I ponder if he could also be extra keen to hearken to a impartial third occasion. It is perhaps value hiring a fee-only monetary planner to evaluate your retirement planning and setting a selected financial savings objective. Maybe your husband will see how a lot more durable reaching that focus on can be with substantial automotive funds.
If that doesn’t work, possibly the 2 of you can attain a compromise. On the very least, might he maintain off on shopping for this automotive till you’ve paid off the bank card? That 0% rate of interest isn’t going to final without end. Paying off the stability earlier than it begins accruing curiosity is a should on this case. Provided that new automotive costs proceed to soar, your husband can also get monetary savings if he generally is a little affected person.
I’m afraid there’s nothing you are able to do in case your husband is really decided to make this ridiculous buy. However hopefully, he’ll come round and see that no automotive is value placing your retirements in danger.
Robin Hartill is an authorized monetary planner and a senior author at The BaghdadTime. Ship your tough cash inquiries to [email protected]
