Even the estate of a deceased planner who executed a will goes through the process known as probate.
A key focus of probate is the one entertained by the creditors of an individual who has passed away. A recent national article on the process notes that creditors avail themselves of it “to try to collect what’s owed them.”
That breeds mixed results.
Surviving loved ones (spouses and other parties) of a decedent obviously pay close attention to probate, as well. They understandably harbor keen concern regarding the extent to which an estate will be legally tasked to pay off outstanding debts, as well as what they might be held personally responsible for.
The above-cited probate overview stresses that what generally happens “depends on both the type of debt and applicable state laws.”
The bottom line concerning estate debt is that heirs are customarily not tasked with paying it back. Most obligations will fall upon the estate itself, with creditors lining up in prioritized fashion. Funeral costs rank high on any list of estate-assumed debt, as do charges assessed for estate administration and unpaid taxes.
Notably, some assets are legally deemed as irrelevant to probate and beyond its purview. Beneficiaries of retirement accounts and insurance policies are not subject to probate accounting, for example. Trusts are solid estate planning tools often employed to shield intended beneficiaries against probate demands.
Questions can arise concerning debt acquired during a marriage, such as a mortgage or credit card outlays. Such exactions might become the responsibility of a surviving spouse.
Many questions and concerns can arise regarding an estate planner’s debt and the probate process. An estate planning professional with an integrated legal and financial/accounting background can provide candid counsel and proven legal representation to surviving loved ones and heirs.