Emotions run high when a relative dies. However, amid this grieving period, the surviving family must navigate multiple legal and financial matters. Aside from distributing the deceased’s assets, they also need to settle their remaining debts. If you are the executor of your relative’s will, you have a crucial role in managing their debts after death.
The executor’s role in managing debts
As the executor, you are primarily responsible for managing matters left behind by your relative. One of the first things you should do is notify people regarding your relative’s passing and close out their accounts. You are responsible for informing creditors and banks as soon as possible to prevent further charges on their accounts. Cutting off any of your relative’s active subscriptions is also important to avoid recurring fees.
The court will settle your relative’s debts through the probate process. During this procedure, you also play a critical role as the will executor. Once the probate process starts, you need to take inventory of all your relative’s assets and appraise them. You are also responsible for settling claims from creditors and distributing remaining assets to beneficiaries.
The beneficiaries’ part in managing debts
Asset distribution only happens after you have settled all debts. This means that you might need to sell off some assets you are set to receive to pay your relative’s debts. In other cases, such as in car or house loans, the beneficiary could receive the asset as long as they continue paying for their monthly dues.
Debts are not inherited directly; you and the rest of the family do not have any obligations to pay for it unless you co-signed for it or co-owned the property. However, debt could impact asset distribution; your relative’s estate mostly pays for their debts. In this complicated instance, consulting with a legal professional experienced in estate planning would be your best course of action. A competent lawyer on your side could ensure the proper settlement of debts and distribution of assets according to your relative’s wishes.