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I’m happily married (25 years) and retired for medical reasons (I’m 58). My husband makes good money. We are meeting all of our basic needs, but his retirement is severely underfunded.
We had to dig out of debt recently and are down to one zero-interest credit card we still owe about $18,000 on. Our home will be paid off in about four years, and I send $300 extra each month.
My husband is very set on getting an expensive new car that costs about $60,000. I can’t talk him out of it, though I’ve tried! He’s OK with working until he’s 70 and would use his old car as the down payment and put down no additional cash.
I’m worried if something happens to him before the new car is paid off. If he passes away and I’m not a co-signer, will that protect me? I don’t want the car, nor do I want the hassle of trying to sell it should he pass. I’m also worried about if he doesn’t pass but needs a long-term facility or nursing home.
How do I protect myself for my future? He has several health concerns, but so do I.
-Mrs. M.
Dear Mrs. M.,
Your husband may be approaching retirement age, but he needs to grow up already. A $60,000 car is something you buy when your retirement accounts are plush and you have little if any debt. But I know I’m preaching to the choir.
To answer your question: The impact on you depends largely on what state you live in. If you live in one of the 41 states that follow common-law property rules, you wouldn’t be responsible for the debt as long as your name isn’t ‘t on the loan. But in the other nine states that follow community property rules — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin — each spouse is equally liable for any debt incurred during the marriage.
In a common-law state, if your husband died owing money on the car, both the car and the loan would become part of his estate. The estate — specifically, whoever is the…
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