A reader recently sent me an email wondering how much of her late husband’s credit card debt she had to pay.

“While he added me as a second card holder, I wasn’t a co-signer on any of his accounts. He opened them all up on his own before we were married,” she wrote.

“Am I liable for these credit card debts? Do I need to use the proceeds from the house we owned to pay off these debts?” she continued. “I was the sole owner of the property at the time of sale since we owned it as joint tenants with rights of survivorship.”

These days, the average American family owes more than $9,000 in credit card debt. That means more people are dying with balances on their credit card accounts. If the estate of the debtholder has the cash, then those funds must be used to pay off these debts before the estate can be settled and any leftover funds distributed to the heirs.

But what if someone dies with $26,000 in credit card debt and has no estate to pay it off?

Just because the debts exist doesn’t mean the surviving spouse has to shell out of her own pocket to pay them, according to Georgia Loukas Demeros, an estate attorney with Fagel Haber (www.fagelhaber.com) in Chicago.

When it comes to credit card debts, Demeros says that surviving spouses should look at each bill to see who is the named account holder.

“If both spouses are listed on the account, like with a mortgage, then both spouses are legally obligated to pay off the debt. However, if someone gives you a credit card but you have not signed an application for the card account, then you generally don’t have to pay off those debts,” she explained.

But there are exceptions to that rule. In some states, the law says that if the credit card debt includes family support expenses, such as food, clothing, health care costs, utilities, funeral expenses, and shelter costs, then the surviving spouse may be liable even if there is no cash in the estate.

“I recently had a client who died with $75,000 in accumulated credit card debt. The credit card company didn’t file a claim against the estate. It simply asked the family to pay the family support expenses,” Demeros recalled.

“In Illinois, it’s actually family law that obligates the surviving spouse to pay debts from which she benefited. Sometimes the credit card companies won’t go after luxury items, or I’ve talked them down to pennies on the dollar,” she added.

Demeros warns executors not to make the mistake of paying any of the estate expenses or claims on their own. “Executors have personal liability if they pay a particular expense and it turns out later they weren’t supposed to pay it,” she notes.

What executors need to do is find out who is owed money from the estate. Executors must publish a death notice of an individual for three consecutive weeks in a local newspaper in order to give unknown creditors the right to step forward.

Actual notice of the death must to be given in writing to known creditors. So if there is a $6,000 balance on your late spouse’s credit card, you must notify the credit card company that he or she has died in writing.

“Creditors have 6 months to step forward and file a claim with the estate. Otherwise, their claim is dismissed,” Demeros said. But filing claims costs money and takes time. Often, creditors will simply settle privately with an estate and move on.

Demeros said that executors and heirs are often confused over what is counted as an asset in the estate.

“For tax purposes, the estate includes everything, including an individual IRA, property that is owned as joint tenants with rights of survivorship, annuities, and life insurance. But for probate purposes, anything that is held in joint tenancy, names a beneficiary, or is held in trust by-passes probate and is paid directly to the named beneficiary,” she explained.

Generally, if an asset doesn’t go through probate, it’s typically an asset that a creditor can’t grab. Which means that the way you title assets should be a top priority in estate planning.

Of course, there are a few exceptions to this rule. If creditors can prove that the decedent contributed to that asset, they might be able to go after it, even if it is titled as joint tenants with rights of survivorship.

Demeros gave this example: Let’s say John puts his daughter on his bank account for convenience purposes or because he is trying to avoid paying creditors, but he contributes all the money that’s in the account. If the creditor can prove after John’s death that he contributed all the money to the account, the creditor can go after the account.

“Creditors might fight for an interest in real estate or assets held in joint tenancy with rights of survivorship. The creditor could claim that the deceased person has a one-half ownership in the property,” Demeros explained. “But if you hold your primary residence is held as tenants by the entirety, it’s as if the surviving spouse owns it all,” she noted. “It’s the ultimate protection.”

More than one surviving spouse has opened up mail only to discover debts he or she didn’t know existed. But there are some easy steps you can take to figure it out.

Start by looking through last year’s tax return, which will be a road map for the estate. It should list bank accounts, real estate owed, retirement accounts and other assets. Your next step is to watch the mail. Over the course of three or four months, checks and bills will tell you about different parts of the estate and expose any creditors.

Finally, sifting through personal papers — which are hopefully organized — will help you find any insurance policies, receipts from safe deposit boxes rented, and a paper trail for other assets or liabilities.

July 1, 2006.