As an executor, you have an obligation to follow through with the testator’s last wishes. You also need to settle all of their personal matters. Executors will have to close accounts in their name and notify creditors about the death. They will also have a responsibility to pay off debts owed by the deceased person.
This obligation applies to household bills, medical bills, student loans and credit card balances. How do you know which debts you’re required to pay as an executor before you dispense assets from the estate to the designated beneficiaries?
Any valid claim requires repayment
There is no rule that allows forgiveness of some debts when the debtor dies. Although their family members aren’t responsible for those debts unless they served as co-signers, the estate of the deceased individual does have responsibility for them.
As the executor, you will have to notify creditors about the death and then liquidate whatever assets you need to in order to pay off what the testator owed at the time of their death. Legally, creditors can require that you liquidate or sell off all the estate’s assets, even though that might leave nothing for beneficiaries if the amount of outstanding debts is high enough. There is no obligation to continue paying debt since you have used up all of the estate’s resources. However, as executor, you can be responsible for debts that go unpaid if you distributed assets to beneficiaries instead.
It’s crucial to understand the law and your responsibilities as executor. This can help you avoid costly mistakes during the estate administration process.