Understand financial responsibility for an estate

On Behalf of | Jun 10, 2020 | Probate |

When a loved one dies, they might leave behind debts. These can include things like medical bills, credit card accounts, tax liabilities and similar items. It is up to the executor of the estate to get these paid out of the estate in accordance with state laws.

Sometimes, bill collectors might contact the decedent’s family members in an effort to collect the debts. The family members aren’t personally responsible for most of these bills. The exception to this is that they would have to pay the balances due for any accounts that they held jointly with the decedent. This means that if they were a co-signer on a loan, they’d have to pay for it. Even if the estate is insolvent, the decedent’s loved ones still aren’t liable for paying off the balances that creditors claim are due to them.

Because some debt collectors are unscrupulous, anyone who has a family member who recently passed away needs to remember that they shouldn’t ever give their personal information to a collector who tries to get them to pay. Instead, they should refer them to the executor of the estate. The executor is responsible for a host of estate-related duties, including filing the final tax returns and paying creditors as long as the estate is solvent.

Understanding the manner in which these estate debts must be paid can be confusing. Executors who aren’t familiar with the applicable laws, including Michigan state laws, should work with someone who is well-versed in these matters. This can help prevent them from making mistakes that will be costly for the heirs and beneficiaries.