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What should you know about an estate’s debts?

On Behalf of | Jan 22, 2025 | Probate and Estate Administration

The loss of a loved one is a traumatic experience, but it can be made much worse if people mourning that loss are contacted by creditors to ask for money because the decedent owed them money. Creditors have the option of turning to the estate to collect any money owed; however, it’s typically not the loved ones who are responsible for the debts.

Loved ones who were co-signers or joint account holders, as well as spouses in some cases, are liable for the debts of the decedent. Anyone else wouldn’t be liable for those debts. When creditors contact people who aren’t liable for debts, those individuals should understand what to do. 

What should people do if they’re contacted by the decedent’s creditors?

If someone is contacted by a creditor for the decedent, they should provide the estate administrator’s contact information to the creditor. The creditor can file a claim with the estate to obtain the payment for the account. 

When there are assets that can be liquidated or funds available in the estate, creditors are paid according to their priority level. If there aren’t assets or funds available, the creditors will go unpaid because the estate is insolvent. 

The duties of an estate administrator are set by law, so anyone who’s in this position should ensure they understand what they should do. This includes handling creditor claims before distributing the estate’s contents to the intended beneficiaries. Working with someone familiar with estate administration may be beneficial for anyone who’s handling those duties. 

 

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