If you are married, you may be wondering if you could be held liable for a money judgment awarded against your spouse. For example, if your spouse injures someone in a car accident and that person sues your spouse, can you be held liable financially?
Minnesota has addressed this concern via Minn. Stat. § 519.05, a statute specifically dedicated to the liability of a husband and wife. The statute states:
(a) A spouse is not liable to a creditor for any debts of the other spouse. Where husband and wife are living together, they shall be jointly and severally liable for necessary medical services that have been furnished to either spouse, including any claims arising under section 246.53, 256B.15, 256D.16, or 261.04, (these apply if the couple receives public assistance- there can be a claim against the estate if one of them dies and have public assistance) and necessary household articles and supplies furnished to and used by the family. Notwithstanding this paragraph, in a proceeding under chapter 518 the court may apportion such debt between the spouses.
(b) Either spouse may close a credit card account or other unsecured consumer line of credit on which both spouses are contractually liable, by giving written notice to the creditor.
According to this law, a person is not liable for a judgment awarded against their spouse. However, aside from money judgments in a lawsuit, there are two exceptions for debts where a person will be held liable for the debt of their spouse. The first is household articles and supplies bought for the family and used by the family. You would be liable for these debts (even in solely the name of your spouse) if you lived together when the item was purchased. Think of a payment plan for a television or couch, for example. The second exception makes a person liable for any necessary medical services your spouse receives. This exception also only applies if you live together. An example for this exception would be a debt after the birth of a child, or if they received ambulance/emergency room services. Both of these exceptions would only be triggered if the spouse defaults on payments.
It is also important to recognize this statute only applies to your individual assets. Assets in both parties’ name are fair game. So, if you and your spouse hold a joint bank account or are co-owners of a car, boat, or home, a plaintiff pursuing payment on a legal judgment against your spouse may also pursue co-owned assets by you. This also applies if you hold a joint insurance policy with your spouse.
Returning to the example where your spouse has injured someone in a car accident, let’s now assume that the accident happened after you allowed your spouse to drive your car after she had been drinking. Another way you may be held liable for your spouse’s wrongdoing in this situation is that the injured party now has a potential cause of action against you for negligent entrustment.
All of this becomes a little trickier if you are in the middle of a divorce. A judge is able to assign debts equitably, so you may be assigned your spouse’s debt upon divorce, which could include monetary judgments.
If you believe this situation applies to you, the best way to protect yourself short of a divorce or legal separation is to separate your assets, keep your own assets in your individual name, and secure an umbrella insurance policy with sufficient liability coverage. And remember to make sure you do not have coverage gaps between your umbrella and other insurance policies, leaving you vulnerable. If you would like to explore options for a divorce or legal separation, contact the family law attorneys at Heimerl & Lammers today at (612) 294-2200.