Typically, executing a will is associated with distributing the assets of the deceased to beneficiaries in accordance with the terms of the will. Although this is one of the important functions of the executor, assets cannot be distributed until debts and claims against the estate are settled. That’s why attention to debt during the estate planning process can turn out to be extremely helpful.
Payments Before Distributions
Although many of us have good intentions about leaving affairs in order —and assets available—for loved ones, neglecting pragmatics can result in extra duties and stress for those we leave behind, including for the executor we’ve designated when making a will. For example, what’s the plan for the credit card, car loan or unpaid medical bills? Informing your executor about both routine bills and how to access the accounts, and any “hidden” debts are very helpful actions to take when we have the chance. As Weinstein & Randisi explain:
Probate laws require that executors pay off creditors and tax obligations before they give any of your property to your loved ones. Anyone that you owe money, ranging from someone who filed a civil lawsuit against you to your credit card company, can make a claim against your estate if you did not pay the debt off before your death.Your executor will then have to use your assets to repay those debts before they can give anything to your closest loved ones. Even Medicaid could make estate recovery claims for any treatment you received in your last years of life.
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 Hints for Executors
When a loved one names you to execute their will, you will hopefully have plenty of time to speak with them about their intentions. You’re lucky if you also get a head start on pragmatics, like where to find the important documents, passwords and account information you will need to settle the estate. You may feel compelled to rush through your duties as executor, but try not to. As legal experts at JAW in Pennsylvania remind us:
Taxes, Creditors, Final Expenses: These are all of the items that need to be paid first prior to the beneficiaries getting their share. This is often why there’s a delay in getting the funds to the beneficiaries…When you have reached the time that the estate has cleared all obligations, you can begin to wind it down. You’ll have to work with your team to build or finalize an accounting that will be reviewed by all beneficiaries. After all beneficiaries have signed off on the agreed accounting, which is called a family settlement agreement, then distributions can commence and the estate administration generally completed.
Good 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.
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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.