finance marriage
Liability for spouse&#39;s actions in the US
<p>This is hypothetical.  Person A and Person B are married.  Person A cannot control the actions of Person B, because that would be domineering.  If Person B makes a mistake that results in financial repercussions (maybe in the form of large fines, insurance deductibles, whatever), but does not have much money, will Person A (who works and saves for retirement) have to pay their spouse's obligation?</p>

<p>In other words, can one be financially ruined due to the actions of their spouse, when they have no real control over them?</p>

<p>A.fm. has accurately stated the general rule that a spouse is not automatically responsible for the other spouse's debts from property in the "innocent spouse's" name. There are some exceptions to it. Some of the more notable exceptions are as follows:</p>

<ol>
<li><p>Income tax debts of joint filers are generally joint and several, unless an "innocent spouse" exception exists.</p></li>
<li><p>Many states have a "family car doctrine" that makes the "head(s) of household" responsible for injuries caused by anyone in the household with the family car.</p></li>
<li><p>As a practical matter, if someone has a judgment lien on jointly owned property subject to a debt (for example, a house or a car), that could trigger a default on the loan and could also hurt the credit of the "innocent spouse" if the lien is not resolved.</p></li>
<li><p>If the "guilty spouse" transfers as a gift assets into the "innocent spouse's" name knowing that this debt is out there, the creditor of the guilty spouse can probably reach the transferred assets if the make their claim soon enough because this is called a "fraudulent transfer".</p></li>
<li><p>If the debt is incurred for "necessities" for the household, the other spouse is responsible for the debt.</p></li>
</ol>

<p>Also, it is worth noting that usually, retirement savings are immune from creditors claims. </p>

<p>This would vary by state, but generally under family law you are not liable for any debts your spouse incurs prior to marriage. Additionally, you’re generally not responsible for carrying out contracts made only in your spouses name. Thus, you likely would not be responsmible for debts accrued under said contracts. </p>

<p>Again, though, this varies based upon what sort of debt you’re talking about (business or personal?), how it arose, and whether you live in a common law or community property state. As usual, you shouldn’t take anything here as legal advice and should consult an attorney in your jurisdiction should this hypothetical ever become more realistic for you.</p>

<p><strong>tl;dr:</strong></p>

<p>It depends on the rules you were married under, which are determined by state law and your prenuptial agreement.</p>

<hr>

<p>Whether one spouse is responsible for the other spouse's debts depends on the applicable <a href="https://en.wikipedia.org/wiki/Matrimonial_regime" rel="nofollow noreferrer">matrimonial regime</a> of their marriage, which can vary depending on where and when thay married, and on the prenuptial agreement (if any).</p>

<p>In the United States, the matrimonial regime is mostly determined by state law, so it depends on the state under whose laws they couple was married. In most states, spouse's property is legally kept separate (<strong>separation of property</strong>):</p>

<blockquote>
  <ol>
  <li><p>Common law is the dominant property system in the United States and has been adopted by 41 states.</p></li>
  <li><p>The theory underlying common law is that each spouse is a separate individual with separate legal and property rights. [...]</p></li>
  </ol>
</blockquote>

<p><em><a href="https://www.irs.gov/irm/part25/irm_25-018-001#idm140332604209888" rel="nofollow noreferrer">IRS, Internal Revenue Manuals, Part 25, 25.18.1.2.1 - Common Law</a></em></p>

<p>However, nine states (Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington and Wisconsin) and the U.S. Territories of Guam and Puerto Rico also have a <strong><a href="https://en.wikipedia.org/wiki/Community_property" rel="nofollow noreferrer">community property</a></strong> system (which however does not necessarily apply to all marriages).</p>

<p>So, if separation of property applies to the marriage, one spouse is not liable for the other's debts (within the limitations described in ohwilleke's answer). If community property applies, then the spouse may be personally liable:</p>

<blockquote>
  <p>Community property includes all financial obligations (debts)
  accumulated during your marriage or domestic partnership. This is true
  even if the debt was incurred by only 1 of you, or even if a credit
  card was in the name of 1 spouse or partner only.</p>
  
  <p>[...]</p>
  
  <p>Your spouse or partner may have gotten into debt in his or her own name that you are not aware of. If the debt was incurred during your marriage or domestic partnership, it belongs to you too.</p>
</blockquote>

<p><em><a href="http://www.courts.ca.gov/1039.htm" rel="nofollow noreferrer">California Courts, Property and Debt in a Divorce or Legal Separation, Community and Quasi-Community Property</a></em></p>

<p>However, even in that case there may be limits or special rules that apply the liability - so you'll have to talk to a specialised lawyer to be sure.</p>
