There’s a lot that goes into administering an estate. Inventorying assets, identifying and reaching out to heirs and beneficiaries, and paying off the estate’s debts can all be overwhelming. The best way to make the process manageable is to break it down into pieces. Let’s briefly look at paying off the estate’s debts.
Paying off estate debts
When you take on an estate, one of your first tasks is to pay off bills that require immediate attention. These expenses might include those tied to a mortgage, a car loan, utilities, insurance policies, and taxes. If you neglect to make these payments in a timely fashion, the estate could end up losing the valuable property to foreclosure or repossession. It might also make it difficult to dispose of other assets, like selling a home without utilities connected.
Other creditors may send informal notice of the owed debt, usually in the form of a standard bill. Under these circumstances, the estate’s executor can pay the debt utilizing the estate’s assets. But if the estate ends up being probated, the executor is required to publish notice of the probate proceedings so that creditors can come forth and file claims. As those claims come in, the executor will then pay them or refuse to pay them. If they refuse, the creditor can appeal that decision to the court.
Remember that an individual’s debts may exceed their cash. Under these circumstances, the executor is tasked with selling other assets to pay off remaining debt. The executor has to be careful with how assets are disposed of, though, as all beneficiaries have to be treated equally. That fairness may be lost when all assets pertaining to one beneficiary are sold.
Navigating the disposition of debts in your case
Maneuvering creditor claims during the estate administration process can be confusing and challenging. But an attorney can help you competently navigate the process so that you can abide by your fiduciary duty and obtain the proper outcome, even if the estate ends up not having enough money to cover all of the bills.