I’m 59 and was lately married. I simply realized he’s in debt for over $200,000. As of proper now, all of our monetary stuff is separate. If he passes away, am I answerable for his debt though it was acquired earlier than our marriage? Additionally, are we higher off submitting our taxes individually?
-M.
Expensive M.,
Getting married with out telling your partner you may have $200,000 of debt is a big breach of belief. I implore you to consider carefully about whether or not you need to keep married to somebody who would hold debt of this magnitude secret from you. However extra on that shortly.
Usually talking, you’re not answerable for money owed your partner incurred earlier than you married. This is applicable no matter whether or not you reside in a typical legislation state, the place it’s simpler for married {couples} to maintain belongings and liabilities separate. It additionally applies in case you dwell in a group property state, the place any belongings or money owed acquired through the marriage are assumed to be collectively owned. As a result of your husband introduced this debt into the wedding, you shouldn’t be on the hook for paying it, even when he died.
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I can’t inform you whether or not you’d be higher off submitting individually, given the substantial penalties concerned. Solely a tax adviser can inform you that. What I can inform you is that even when your husband owes the IRS, you wouldn’t be liable since he racked up that debt earlier than you married. In the event you filed a joint return and had your refund intercepted, you may apply for injured partner standing. Then you may acquire your half of the refund.
Now again to the elephant within the room, which is the truth that your new husband didn’t inform you concerning the $200,000 he owes. I’ve so many questions. Have you learnt how he acquired the debt? Is he present on funds? Did he inform you about his debt, or did you uncover it by yourself?
There are loads of causes somebody might purchase large debt. Clearly, if it’s the results of a significant sickness, that’s rather a lot completely different than, say, if he went into debt from playing or power overspending. However even when it’s the product of pure unhealthy luck, that’s no excuse for hiding debt out of your partner.
My largest concern isn’t a lot concerning the cash your husband already owes. I fear about any future debt he might incur. In the event you dwell in a group property state, you may be responsible for any debt your husband acquires whilst you’re married.
The truth that he stored such an enormous secret makes me query his trustworthiness. Within the worst-case state of affairs, he might take out fraudulent debt in your identify. That’s a reputable concern, given {that a} partner usually has all the knowledge they should steal your identification.
Regardless of how a lot you retain your funds separate, your husband’s debt impacts you. Underneath the most effective of circumstances, I’m afraid that you simply’ll be left shouldering many of the bills whereas your husband tries to pay down this debt. Possibly this marriage is price it to you. However that’s one thing he ought to have made you conscious of earlier than you exchanged vows.
Assuming this isn’t a dealbreaker, you should deliver all the things about your funds into the open. You must each assessment every of your three credit score studies. Be sure to perceive each debt that’s listed. There aren’t any dumb questions while you’ve simply found your partner has six figures of debt. Be vigilant about monitoring your credit score studies, as nicely.
It’s additionally important that you simply make a finances and recurrently assessment how a lot you’re spending and incomes. Sometimes, I’d counsel doing this on a month-to-month foundation. However given the quantity of debt concerned, this needs to be a weekly prevalence.
If cash mismanagement is on the coronary heart of your husband’s debt, perhaps he might agree to show over his paycheck to you and mean you can pay the payments. This could be a short lived answer. But when he has a historical past of reckless spending, it could assist if he has much less room to fail.
No matter the way you proceed, not at all do you have to mix funds. Don’t make your husband a licensed person in your accounts. Don’t co-sign for him. Don’t open any joint accounts collectively.
That is about far more than $200,000 of debt. Your husband stored an unlimited secret from you. Belief isn’t given. It’s earned. Proper now, your husband has a protracted highway forward.
Robin Hartill is a licensed monetary planner and a senior author at The PNW. She writes the Expensive Penny private finance recommendation column. Ship your tough cash inquiries to [email protected] or chat along with her in The PNW Community.