Spouse dies while separated but not divorced in Texas

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Latest post 04-07-2011 2:55 PM by Drew. 11 replies.
  • 04-07-2011 11:42 AM

    Spouse dies while separated but not divorced in Texas

    My husband and I filed for divorce in Jan. 2010.  Shortly thereafter, he was diagnosed with cancer.  I non suited the divorce while he was receiving cancer treatments to allow him to remain on my insurance.  We also lived together again for a few months while he was receiving chemo but separated for good in October 2010.  We negotiated a settlement agreement (essentially an agreed divorce settlement) in January 2011 but, once my attorney drafted the agreement, my husband refused to sign.  My husband's health has deteriorated to the point that he is being placed on hospice.

    I own a home that I purchased before our marriage. 

    As far as I know, all of my husband’s medical has been covered by the insurance company and his premiums were being paid by a charity organization. 

    I know that my husband has quit paying on his credit cards and car (all in his name). 

    When we separated originally, he was to take the debt in his name and I was to take the debt in my name (we’ve never had debt in both our names). 

    I know he has a lump sum of cash in his bank account b/c he’s been receiving disability payments but has not been paying any bills in months. 

    At time of separation, he did not have a will.

    1)   What debt of his could I be liable for?

    2)   Can he will, to someone other than me, his 50% interest in my 401k (that accrued while we were married)? 

    3)   He receives disability/social security and has been receiving the family maximum even though we are separated.  If he passes and we are still married, will I receive benefits as a surviving spouse and receive benefits for our child together? 

     

  • 04-07-2011 12:08 PM In reply to

    • Drew
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    Re: Spouse dies while separated but not divorced in Texas

    Laymans take:  Texas is a bit odd as to community property and separate property and  spousal election rights --you need to lay it out on paper and review it with TX counsel. My gut reaction is NO will is easier for you to address than a will which seeks to leave property elsewhere--however to some extent if the pot is empty it does not really matter-he cannot will away stuff he doesn't have or stuff ahead of his creditors .

    You probably want to remain married  -makes SS survivor issues  easier for spouse and child.  If you were married 10+ years you probably still qualify even if you got a last second divorce --but for a short marriage you could be left in cold with a quickie divorce--I'm not sure you gain anything via a divorce.

    There is no divorce and no separation agreement -as you post it.  And no long term abandonment issues.

    I doubt he can will away his rights to your property-401k that have yet to even be split off.

    Society tends to make the spouse  responsible for the  essential care of the other  but not the personal debts of the other

    If he were to put you on his account as a joint holder or POD that might pass to you ahead of his creditors --is he likely to be  that "cooperative"  How about a joint account or POD with the childs name on it--anything that works to get it out ahead of creditors? He may hate your guts but be willing to make some accommodations for his child?  If the account passes into his estate the creditors will get first crack at it after  any executor/administrator  costs.

    His estate is responsible to address  his debts--but if the pot is empty--so be it......

    Because TX is a community property state you could be on hook as to some of his debts even though your name is not directly on same---details are beyond me.



  • 04-07-2011 12:15 PM In reply to

    Re: Spouse dies while separated but not divorced in Texas

    Drew is right. Too many variables involved.

    I suggest you consult an attorney who specializes in helping the terminally ill get their affairs in order.

    The alternative is uncertainly until he dies and then probably paying a lot more for a lawyer to handle things properly.

     

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  • 04-07-2011 12:28 PM In reply to

    • Kivi
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    Re: Spouse dies while separated but not divorced in Texas

    I am going to limit my discussion to the Social Security Administration (SSA) aspects of your question. If your child is his biological child (not a step child), you will be able to receive Children's Insurance Benefits for that child until he or she reaches age 18 in the event of his death. Benefits can continue after age 18 if the child is a full-time student in high school. Generally, benefits will end at age  19, even if the child has not yet graduated from high school. Some exceptions do exist for disabled children.

    For you to receive survivor benefits, you would have to be caring for a child under the age of 16, Survivor benefits for yourself would be subject to SS earnings limits, currently around 14k per annum. Since you mentioned a 401k, I am assuming that you are gainfully employed on a full time basis and your probably make a lot more the 14k per annum.  Earnings limits also apply to children's benefits, but minor children, even teenagers, seldom earn enough to this one to be an issue.

    If you were marreid to him for at least ten years, you may qualify for survivor benefits again at age 60. There is a significant reduction to taking them early and they are not payble concurrently with benefits that you may receive based upon your own earnings record under SS. (You can select the benefit that pays better.) The SS earnings limits will affect these benefits as well until you reach your full retirement age under SS, which is probably 66 or 67 for you.

     

  • 04-07-2011 12:33 PM In reply to

    Re: Spouse dies while separated but not divorced in Texas

    I understand that there is no legal separation in Texas.  We are either married or divorced.  He has no assets, only debt and my asset (my home) is my separate property under a premarital agreement.

    We have been married for 5 years.  I am not employed and not receiving any income or child support.  I am 27 and a full time graduate student.  I have a 401k from my previous employment.  Our son together is 3 and his son from another marriage is 9.  

    I have a divorce attorney who tells me I need to hire a tax attorney and probate attorney which is difficult to do when I'm on a very fixed budget to make ends meet.

  • 04-07-2011 12:57 PM In reply to

    Re: Spouse dies while separated but not divorced in Texas

    You are not divorced and it does not sound like you were "legally" separate. So everything proceeds as it would if the divorce never came up.

  • 04-07-2011 1:22 PM In reply to

    • Drew
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    Re: Spouse dies while separated but not divorced in Texas

    I am not sure you need 3 levels of expensive legal talent  to discuss how to address a near empty pot.

    What assets - funds are likley in his pot--how much are we talking about ?

    Who is left to care for his 9 year old child ?  Authority do to do?

     Each of his children is likley entitled to SS survivors  benefits. (There is a maximum cap for all family/spouse)

    Funds that flow into his estate must be used to pay his debts first--thats not hard to address.

    TX recognizes both joint and POD accounts. In an equitable sense it might make sense to slide out his account balance via 2 PODs, 1 each to each of his children  50/50 --for minor children that could involve court supervised accounts--a killer for  small sums -but it sure beats no $$ at all--there are other ways to do so IF he is willing.

    If he has $8000 in an account it doesn't make sense to use a $9000 tool to get it out if  a simple signature card delivered to back will do it?

    Sure makes NO sense to complete the divorce as I see it.

    You divorce attorney should be able to give you an decent estimate as to any exposurer to his debts you might have.

    In my book it sometimes makes sesne to have a very basic will properly executed a safe  drawer--if not needed it gets torn up.  My friend  with  a terminal problem  just got one done-first quote was $8000  and he got a will, DPOA and some other stuff form a good estate lawyer nearby for about $350 ---and I'll bet the one on $59 software would also work--and he has some issues which require some thinking. .



  • 04-07-2011 1:50 PM In reply to

    Re: Spouse dies while separated but not divorced in Texas

    He has $5000 of disability payments in a joint bank account.  

    His first wife will have custody of his son when he dies.

    I have a durable POA for him but I assume he has executed a more recent one naming his mother as POA.  His mother has indicated that she will be draining the account to pay for funeral expenses.  That will leave him no assets and only debt.

    He may have had a will done since our separation, which I am sure, bequeaths nothing to me other than debt.

    Does anyone know how the SS amounts will be dispersed? Do just the kids receive equal amounts or will I receive an increased amount b/c we are still legally married and caring for our minor child?

  • 04-07-2011 2:06 PM In reply to

    Re: Spouse dies while separated but not divorced in Texas

    I highly doubt he can claim any of your 401k and will it to a family member. Divorce settlements normally do not get handed off to surviving relatives plus as of right now you are not even divorced therefore there is no settlement.

    I am pretty sure you and the mother of his first child will receive the same benefit. On an urelated note...you should secure some employment. You now have a child to raise solely on your own. It will be very hard to take care of the child with little to no income. Unlear how long it takes to receive SS survivor benefits once he passes.

     

  • 04-07-2011 2:10 PM In reply to

    • Drew
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    Re: Spouse dies while separated but not divorced in Texas

    Who is the other name on the joint account?  Critical!!!

    Any and all POAs evaporate the moment he passes.

    Your DPOA remains valid unless he specificallly revoked it. (I'd not ask any questions lest he do so!)

    Are you on an authorized signature for that joint account ?

    The pot is darn close to empty!!!

    Your  SS benefits are independent of what the EX and her son may get--so don't fret over that part.

    My personal view of expensive funerals is they are  a waste unless he has the money for same--and he doesn't.

    You can go out with reasonable dignity for under $ 2000--but I'm not makeing the call--Mom seems destined to do so. .



  • 04-07-2011 2:32 PM In reply to

    Re: Spouse dies while separated but not divorced in Texas

    When we married, he added me to his checking account (the joint account I referred to).  I am a signor on the joint account.

    His mom would rather have a nice funeral then have the money go to creditors or me. 

    I have not interfered with that account and treated it as his separate account since the date of separation.  I know he opened another individual account for other income (like assistance from family members).  He left the joint account as is so there was no disruption in the direct deposit of his disability benefits.

  • 04-07-2011 2:55 PM In reply to

    • Drew
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    Re: Spouse dies while separated but not divorced in Texas

    Well you are making a major tactical mistake and too many incorrect assumptions about that joint account.

    The first person to wise up can clean it out and I would not be suprised if he or Mom has not done so already.

    In theory that account becomes your sole account the instant he passes but if Mom clears a check on it the day before he passes its an empty pot.

    If the account is still sitting there  with nontrivial funds in it  I'd do what I needed to do to protect my and my sons future in about 1/2 a heartbeat--and worry about sorting it out later --and do it in cash .

     



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