Estate Planning can be a complicated matter. Depending on your financial and familial circumstances, there are certain factors you should be aware of, such as the Family Allowance. When a person dies, some of his or her property automatically transfers to his spouse or dependent family members. This is known as a family allowance or family exemption. Family exemption laws differ between states, so it’s important to talk to your estate planning attorney for detailed information about the rules in your area.
Creditors: Let’s say your husband dies leaving behind both assets and debts. This property is referred to as an estate. You husband’s creditorsthose people or organizations to whom he owed a debthave a right to be repaid by filing a claim and taking property from the estate to satisfy the debt. This happens once your husband’s estate goes before a probate court and the creditors then file claims asking the estate administrator to pay them back.
Family Exemption: So what happens if your husband left behind property that was equal to the debts he owed? Does that mean you will receive nothing? No. In states with a family exemption a specific amount of property is exempt from probate creditors. This exemption exists to allow a decedent’s dependent family to have at least some money to meet living expenses instead of allowing creditors to take everything. So, let’s say that your husband had an equal amount of debts and property, and further that your state has a $50,000 family exemption. In this situation, you keep the $50,000 and the creditors who want to be repaid will be out of luck because the exemption precludes them from taking that amount regardless of how much they are owed.