It’s not uncommon for people to have outstanding debt balances at the time of their death. If an estate must be probated, Texas law says that those debts must generally be paid before assets are distributed to beneficiaries. The estate representative is typically responsible for ensuring that valid creditor claims are satisfied in a timely manner.
The estate is responsible for paying a decedent’s debts
It’s important to note that you are not responsible for paying off a deceased family member’s debts unless your name is on the account. Assuming that it is not, assets within the estate will be used to repay them. If necessary, assets will be liquidated to obtain the money needed to pay income taxes, outstanding credit card debts and other balances.
You can choose to assume a debt
If you inherit a home from your deceased relative, you may be able to inherit it right away by promising to stay current on the mortgage. You may also be able to assume the loan on a vehicle that was left to you by a parent, grandparent or sibling.
Don’t forget about administrative costs
Estate representatives usually receive a fee for their services. They may also be able to bill the estate for legal fees, appraisal fees and other reasonable costs that are incurred during the probate process. Whoever serves as executor will be required to provide a full expense report to the court before the case can be closed. The executor may also be required to provide periodic updates as to how the estate’s assets are being managed during the course of a probate proceeding.
If you’re appointed to serve as an executor, you should have an attorney help you settle the decedent’s affairs. This may help to ensure that you don’t make any mistakes that could expose you to lawsuits from creditors, beneficiaries or other parties involved in the matter.