When someone drafts an estate plan or writes a will, they leave behind instructions for their family members and beneficiaries. However, they will not be around to ensure that these instructions are followed. That is the job of the estate executor.
The executor often starts by distributing estate planning paperwork to beneficiaries and other interested parties. They may take an inventory of all the deceased person’s assets, trying to locate everything mentioned in the will. They then help facilitate the process of distributing those assets to the correct people.
While doing this, they may also have to pay off outstanding debts. In many cases, creditors must be paid before assets can be distributed. This means the executor may need to pay off a mortgage loan, settle credit card debts and pay taxes before distributing the remaining funds.
Are they personally responsible?
While the estate executor is responsible for handling debts, they are not personally responsible for paying them. In other words, they do not have to settle debts with their own personal funds. They do not inherit financial obligations.
Instead, the executor uses funds from the estate to pay off debts. Some beneficiaries may not inherit as much money as they expected if there are not enough funds in the estate to satisfy both the debts and the planned asset distributions. However, the estate executor does not personally assume the debts, nor do any of the beneficiaries.
Working through estate administration
The estate administration process can be complicated, especially when handling complex financial matters. Those involved need to understand their legal options.