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How is a HELOC Debt Handled When One Spouse Dies

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  • 02-21-2014, 04:24 PM
    gguubb
    How is a HELOC Debt Handled When One Spouse Dies
    My question involves estate proceedings in the state of: California
    My spouse recently passed away. There is a balance on the home equity line of credit. Is my spouse's estate liable for 1/2 the debt?
    Thank you
  • 02-22-2014, 09:29 PM
    krn001
    Re: How is a HELOC Debt Handled When One Spouse Dies
    Are both names on the Heloc & house title?
  • 02-23-2014, 02:32 AM
    flyingron
    Re: How is a HELOC Debt Handled When One Spouse Dies
    Most likely the surviving spouse is 100% liable for the debt. How the house is titled is immaterial. The question is how the HELOC loan was written but I can almost assuredly guess that both spouses agreed to be liable.
  • 02-23-2014, 12:58 PM
    gguubb
    Re: How is a HELOC Debt Handled When One Spouse Dies
    House was jointly owned and both names were on the heloc. Heloc debt was all obtained while married. Wouldn't the heloc balance be allocated equally between the surviving spouse and the deceased estate?
  • 02-23-2014, 01:01 PM
    Mr. Knowitall
    Re: How is a HELOC Debt Handled When One Spouse Dies
    Is the house being sold, with half of the equity being probated as part of the estate?
  • 02-23-2014, 01:07 PM
    llworking
    Re: How is a HELOC Debt Handled When One Spouse Dies
    Quote:

    Quoting gguubb
    View Post
    House was jointly owned and both names were on the heloc. Heloc debt was all obtained while married. Wouldn't the heloc balance be allocated equally between the surviving spouse and the deceased estate?

    Is his estate, or part of the estate other than the house, going to someone other than the spouse? That is the only scenario I can see where it could possibly make a difference.
  • 02-23-2014, 01:27 PM
    Welfarelvr
    Re: How is a HELOC Debt Handled When One Spouse Dies
    It seems the debt is community and the community estate is responsible. There really is not a splitting just because of a death. Even the OPs separate property can be taken for the debt as I assume it was obtained during the marriage. The house is the security which is why Mr.Knowitall asked the question he did. Without all the facts, the particular question cannot be answered as the whole of the situation and why it matters is important. But, if one wanted to do what is "fair" or equitable, the asset that secures the debt is the portion that should be responsible for the debt. I suspect the OP is not intending to sell and does not particularly like the implications of the question.
  • 02-23-2014, 04:42 PM
    gguubb
    Re: How is a HELOC Debt Handled When One Spouse Dies
    thank you all for your answers. 1/2 of the estate is going to his children from his first marriage. I have assummed the mortgage balance on the property along with the property. But the equity line still has a balance on it with the property as the secured asset. the HELOC was run up with personal items purchased by deceased spouse during the marriage. So I guess bottom line that I was wondering about was does the HELOC go with the property, or is it a community debt to which both spouse's estates owe 1/2. thank you so much!!!
  • 02-24-2014, 07:01 AM
    flyingron
    Re: How is a HELOC Debt Handled When One Spouse Dies
    You need to run this with the lawyer, you still have not indicated enough information. We can only guess. If the house was community property, it matters not what the will states. The house is the husband's. While you may be able to collect something from the estate be known that that means nothing to the lender. If the husband signed the loan, the bank can come after him as if he was the only person involved in the transaction. Where the money was spent after it was borrowed is largely immaterial.
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