Is woman responsible if husband dies and leave debts behind?

Dear Bruce: My cousin is married but has been separated for more than 10 years. They didn't divorce due to her being able to stay on his health insurance. Her husband is a big spender, and if he should pass away, could she be liable for the balance on his credit card? It is not a joint account. — Pat, via email

Dear Pat: The fact that your cousin is separated in most situations is of no moment; she and her husband are still married! If there are assets in his estate, those assets would have to be used to settle any accounts. If there is no estate, your cousin has no obligation to attire those debts, since she is not on the credit account. If there are others on any of his accounts, they may have obligations. It would seem to me that your cousin is completely safe.

Dear Bruce: We have a simple IRA with our employer. We have had it since 2005. Our broker invested us in a variable annuity. Is this a good idea? If not, how do we get out of it with out being penalized? Where is a good place to put it? Any help would be appreciated! — E.B., via email

Dear E.B.: There are no simple answers to your question. The fact that you had the variable annuity for six years tells me that the likelihood is that there will be little or no penalty if you wish to invest elsewhere. While I am not a particular fan of Variable Annuities, there are circumstances where they serve a purpose. You haven't indicated your age, amount of moneys that are in the IRA, etc. Without these specifics, any advice that you would be given would be shaky. If you would drop me another note, simply telling me your ages, your tolerance for risk and when you attend to retire, I will be able to comment.

Dear Bruce: I lost my job due to a reduction in the workforce a year ago. I am wondering what I should do with my 401(k). I am 60 years old, and my husband will be 62 in December. He lost his job about two years ago. I was collecting unemployment, but since I am now receiving a small pension from my previous employer, this has stopped. I still owe $5,000 on my car loan and was wondering whether I should take money out of my 401(k) to pay this off. I have been applying for jobs but not having any luck. Any advice would be appreciated. — A.P., via email

Dear A.P.: You can, of course, withdraw money from your 401(k) without penalty; you'll have to pay taxes. Given your job situation, it's possible you won't have to pay taxes.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to:


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