Answers to Common Questions and Situations

We know how complex and confusing probate situations can be, and did our best to organize an easy to follow knowledge base to help address some of your most pressing questions. Get in Touch
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Not Enough Money in the Estate to Pay the Debts?

no money in estate to pay debtsIf the value of the estate covers the deceased person’s debts, the beneficiaries or heirs will still receive some amount of inheritance and you don’t need to worry about lacking funds. However, if it looks as though there is not enough money in the estate to cover the debts, then it is important to seek legal counsel. State law gives priority to certain creditors over others. Typically expenses incurred for the funeral and administration of the Estate are covered first. Items such as medical expenses for the deceased person’s last illness are next, followed by federal taxes, state taxes, real estate liens, mortgages in order of priority, and then other debts.

If looks like the debts can’t all be paid, the executor and beneficiaries/heirs will not be responsible for paying back those creditors so long as the Estate is handled properly. Rather, the creditors must take the loss and the heirs will not inherit anything.

All of the assets of the estate – not just money – are subject to being used to cover as much debt as possible. Unfortunately, that means that the Personal Representative may be legally required to sell Estate property, including the Estate home, to pay Estate debt.

Fortunately, there are sometimes legal ways of reducing or eliminating creditor claims so that the family receives an inheritance and certain important property can be saved.

If you have questions or find yourself in this situation, please contact our team for a complimentary consultation.

Disclaimer: The information above is provided for general information only and should not be considered legal advice. Our probate attorneys provide legal advice to our clients after talking about the specific circumstances of the client’s situation. Our law firm cannot give you legal advice unless we understand your situation by talking with you. Please contact our law office to receive specific information about your situation.

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About the author

Erik J. Broel
Founder & ceo

Erik founded the firm in 2009. He sees it as his personal mission to demystify the process of handling an estate or trust, and to help people by making the complex estate process simple and accessible. He believes there is always a better way to do things, and loves finding new and innovative ways to deliver better, more effective service that solves the client’s key problem or issue, and improves the client’s life.

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