When a loved one names you to execute their will, take it seriously. Count yourself lucky if you have plenty of time to speak with them about their intentions. Take the time to get helpful pragmatic information too, like where to find important documents, passwords and account information. Estate planning attorneys also advice: don’t forget to discuss debt.
More Debt Than Assets?
As upsetting as talking to loved ones about their “post-death” affairs can be, it’s best to be as knowledgeable and organized about executing an estate plan as possible. No one wants to end up with detective duties amidst grief. As the affairs of the famous frequently demonstrate, death renders good intentions—and sticky notes —insufficient. Estate planning attorneys remind us to discuss not just the assets available for beneficiaries, but also anticipated debt. After all, assets cannot be distributed until debts and claims against the estate are settled. As New Orleans City Business reports:
If someone dies with more debt than assets, their estate is considered insolvent and state law typically determines the order in which the bills get paid. Legal and other fees for administering the estate are paid, as well as funeral and burial expenses. A temporary living allowance may be provided for dependent spouses and children, depending on state law. Secured debt such as mortgages or car loans must also be repaid or refinanced, or the lender can claim the property. Federal taxes and other federal debts have a high priority for repayment, followed by state taxes and debts…If Medicaid paid for someone’s nursing home expenses, for example, the state can file a claim against the estate or a lien against the person’s home…The last debts to be paid include unsecured debt, such as credit card bills or personal loans. If there’s not enough money to pay those debts, the creditors get a share of whatever is left. Only after creditors are paid in full can any remaining assets be distributed to heirs.
Lawyers also remind us that executors have a legal duty to ensure compliance with applicable laws and adhere to the local probate process. That’s why executors are often required to obtain a type of fiduciary bond frequently referred to as an executor bond. Colonial Surety is here to help executors in any state quickly obtain their required bonds. At Colonial, the steps to obtaining executor or other probate bonds are quick and easy: get a quote online, fill out the information, and enter the payment method. Instantly print or e-file the bond right from anywhere—even probate court.
Helpful To Know
Though the process differs a little bit in each state, generally, as executor, you must file the death certificate with an original copy of the will in probate court. You will then be given a letter of testamentary. This officially recognizes you as the executor and enables you to begin taking actions on behalf of the estate. Unless the affairs of the deceased are complicated, the probate process commonly takes a few months to a year. Many states have developed expedited processes, especially for modest estates.
Unpaid taxes, debts, conflicts among family members or contested wills are examples of what can cause complexities and delays during probate.Keep in mind that in many families, a home is the most valuable asset—so it can be especially important to consider the options for passing it on to the next generation with an estate lawyer. Without careful planning, conflicts can erupt that delay settlement of the estate—and damage family relations.
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Founded in 1930, Colonial Surety Company is a direct writer of surety bonds and insurance products. Colonial is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed, and licensed for business everywhere in the USA.