It is understandably a terrible moment for the family when a loved one dies away. Many people have concerns about their estate, particularly early in the Probate/Estate Administration process. Here is where one must counsel an experienced trust and estate attorney before executing an estate plan.
We’ve included some of the most frequent questions posed by will and trust executors in this blog.
Question #1: “As Administrator, Am I Responsible For The Debts Of The Person Who Has Passed?”
When invoices begin to arrive after a passing, the administrator may be concerned about being held responsible for the deceased’s debts. In most cases, though, you are not obligated to pay such estate obligations with your own money. Liabilities accrued while the dead individual was living and costs incurred by the estate after their death should be reimbursed using estate assets. For instance, if the deceased individual left a savings account, the administrator should deposit the funds to an estate bank account and utilize the funds to pay debts.
Question #2: “What Should I Do If There Isn’t Any Cash Available And Bills Must Be Paid Right Away?”
In some instances, the administrator or family members may require to pay some costs out of their own pocket in the interim. One instance is that you may be required to pay immediate burial or cremation costs. Keep meticulous records of your spending, including how much you pay, what you spend it on, and when you spend it. You can compensate yourself for the estate money later if you keep appropriate documentation and that spending is essential.
Question #3: “What if the estate is little, and I’m not sure there will be sufficient funds to pay all of the deceased’s debts?”
If you feel that the estate funds will not be sufficient to fulfill the deceased person’s bills, be cautious before settling for anything with your own money or estate funds. Keep in mind that, depending on the state, creditors may have up to a year to present their demands for payment.
State legislation establishes the order in which the executor shall pay liabilities, and creditors at the bottom of the list will be out of luck. If you distribute money from the estate to lenders who aren’t authorized to it, you may be required to refund the estate for the damage you caused. In such a situation, one must consult trust litigation lawyers.
Question #4: “Am I responsible for paying my deceased mother’s or family’s credit debt?”
Let’s pretend your mother died with little wealth and a lot of debt. In her will, she nominated her adult child (in this case, you) as executor. The bank that provided her credit card has been phoning you regularly, inquiring about your plans for repaying the debt. Are you in charge of her debts?
In this case, the answer is that you are not legally accountable for her debts —and don’t be pressured by the credit card provider to take on the obligation! If your mother’s property has enough funds to cover all of her obligations, it is your constitutional responsibility to reimburse them from the estates. If there isn’t enough wealth to go around, state law dictates the order in which debts are paid. Credit cards are ranked towards the bottom of the precedence list in most states, after funeral expenditures, attorneys’ fees, taxes, and other liabilities.
Common Question #5: “If I am the surviving partner, am I legally responsible for the deceased spouse’s debts?”.
In rare cases, survivors may be held personally accountable for the deceased’s liabilities. Surviving spouses are responsible for debts accrued by the pair. For instance, the survivor is liable for charges made on a shared credit card, regardless of which spouse made the transaction. The survivor may not be responsible if the departed spouse accumulates the debt on his or her own. It is determined by state law, the type of debt, and how the couple owned property jointly.
For instance, lenders loaned money to only one spouse might likely pursue the deceased spouse’s part of the couple’s assets. However, if the couple possessed property “as tenants by the entireties” (which is only allowed in a few jurisdictions), lenders could not seize the estate to pay off one spouse’s debts.