Legal Question in Credit and Debt Law in California
Spousal liability after separation before divorce
My sister has been physically, but not legally, separated from her spouse for 2 years. During that time he has incurred many debts; i.e. medical, personal, the IRS, and the California Franchise Board. Her divorce is in process and will not be final for several months. She and the children live in a house with both names on the note and her name only on the deed. An inheritance currently in probate will become hers soon. Can his creditors pursue her property and assets to pay his debts? There isn't a lien on the house yet. Which assets are safe and which are susceptible?
2 Answers from Attorneys
Re: Spousal liability after separation before divorce
Generally, if they separated with the intention of divorcing and never reconciling, a creditor cannot go after her assets. However, if tax returns were filed jointly, she would be liable. Also, if the property was deeded to her in order to get those assets out of his name to protect it from his creditors, that property would still be subject to claims by creditors.
Re: Spousal liability after separation before divorce
The inheritance is her separate property and should be safe, if his debts were incurred after the separation and are not "community debts", for the benefit of both of them. Whatever community interest he has in the house, if any, is vulnerable to creditors--if it's in her name, they'll have to prove he has an interest in the home. She should see an attorney to review the debts and take whatever further steps are necessary to protect her property.
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