How to pay off dead spouse’s debt

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Q. My husband recently died. We had totally separate bank and credit card accounts but we did file joint tax returns. Upon his death, his outstanding bills were more than his assets. I know that I’m not liable for them personally, but as the executor, I need to know if there’s a hierarchy for who gets paid first? I paid all the funeral expenses myself, but there are medical bills, a loan and credit card bills.
— Widow

A. We’re sorry to hear about your husband.

When an estate does not have sufficient assets to pay all debts in full, they are prioritized.

First in order to be paid are reasonable funeral expenses and next are the costs and expenses of administration, said Yale Hauptman, an estate planning attorney with Hauptman and Hauptman in Livingston.

“If you advanced the funeral expenses then you can be paid back first,” he said. “You can also reimburse yourself for the costs of probating your husband’s will and any costs associated with the administration of his estate, such as legal fees.”

Next in line to be paid are debts and taxes entitled to preference under federal or state law, Hauptman said.

Reasonable medical and hospital expenses related to your husband’s last illness are next in line to be paid, so presumably the medical bills you mentioned would fall in this category to the extent they relate to the last illness, he said. If there is a medical bill for treatment unrelated to his last illness, that would not be included here but in the next category of credit card bills, unsecured loans and other debts.

Hauptman said you first pay every legitimate claim in each category before moving to the next category.

“If there is not enough to pay everyone in a particular category that’s when the creditors are paid proportionally,” he said. “For example, if there is $50,000 left to pay medical bills from your husband’s last illness but there are $100,000 in bills, each creditor should receive 50 percent of its overall bill.”

It also means there would be nothing left to pay the credit card bills which fall into the next category, he said.

Hauptman said creditors are required to submit their claims within a specified time frame and if the personal representative of the estate disagrees with the amount claimed, she must notify the creditor.

“There is then a process by which the creditor must prove its claim and seek a judgment before you are required to pay it,” he said. “If you are unsure of what to do it is best to consult with an attorney familiar with the estate administration process.”

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This post was first published in January 2018. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.