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Legal Updates

New Law May Offer Protection to Surviving Spouses from Debt of Deceased Spouse

The common question of whether a surviving spouse bears responsibility for the debts incurred solely by their deceased spouse is undergoing a transformation. A relatively recent legal development has the potential to offer relief to surviving spouses in this situation provided there is proper estate planning.

 

Under Probate Code section 13550, a surviving spouse was traditionally exposed to personal liability for the debts left behind by their departed partner. This effectively meant that any assets inherited by the surviving spouse from the deceased could be seized to satisfy the outstanding debt. Even properties automatically transferred to the surviving spouse, such as joint bank accounts or jointly-owned real estate, remained susceptible to this provision's reach. See Kircher v. Kircher, 189 Cal. App. 4th 1105 (2010).

 

In 2022, the California Legislature  passed AB 1716 (2022), which may provide some relief to a surviving spouse in this situation. Under the new law, non-probate property – i.e., trust, joint tenancy, pay on death accounts – are excluded from the reach of Probate Code section 13550. The key here is non-probated property. If a spouse dies intestate (i.e., no will or other estate planning), it is possible the entirety of the couple’s community property could be subject to creditors’ claims in a probate proceeding. But if there is no probate, the new legislation clarifies that property received by the surviving spouse from the deceased spouse will not be subject to claims. 

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