Why Should an Executor be Concerned About Estate Debts?

Executors are often tasked with paying of the debt of the deceased.

Are you are an executor for an estate?

Did the decedent die with debt?

According to a recent nj.com article titled “What happens if executor doesn't pay off dead person's debt?,” you will be responsible for making sure legitimate creditors are paid.

Why?

You were named in the will to administer the estate of the individual who died.

This means you must follow the instructions left by the decedent in the dividing of his or her estate.

What does this mean?

You must identify, inventory, and gather all the assets.

You must contact and pay beneficiaries.

You must also pay any taxes on the estate and file an estate tax return, if necessary.

You must also pay any valid creditor claims on the estate.

Want to make it easier?

You can hire an attorney through the estate.

What if the estate cannot pay all of the bills?

The state laws may have guidelines setting forth a priority of claims?

For example, New Jersey requires debts be paid in a specific order.

Creditors must submit claims in a specified amount of time.

You are then given a time frame to dispute or pay the claims.

Be sure to check the laws of your specific state regarding how it handles creditor claims against estates.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: nj.com (June 5, 2018) “What happens if executor doesn't pay off dead person's debt?”