Question: I’m an authorized card holder on my mother’s credit card account. When she passes away, will I be responsible for the debt?
Answer: The answer is most likely not. The credit card company should look to your mother (or your mother’s estate). My guess (without knowing all the facts) is that the contract is between your mother and the credit card company. If you have a financial power of attorney or if your name is listed on the account for convenience purposes, the primary account holder is liable for the debt. That being said, if a card was issued to your mother but has your name attached, by using the card you may have implicitly agreed to become secondarily liable on the purchases you make on your card under a doctrine in the law which doesn’t allow parties to receive a benefit at the expense of another. Comment: Another potential concern is the potential for liability if one knowingly charges items for another’s benefit when the person knows she does not have the ability to pay the charges. Best practice would be to check the account agreement itself. As a final word on this, there are perhaps better ways to handle another’s financial affairs without using a credit card.
ABOUT STEVE SHANE
Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates. You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn. WASHINGTON | BALTIMORE | FREDERICK | PHILADELPHIA | WILMINGTON | VIRGINIA | NEW YORK