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Dealing with debt as an estate executor

You may have felt honored and flattered when a loved one asked you to be the executor of his or her estate. Perhaps you had visions of being the person who delights the beneficiaries of the deceased by announcing what each would inherit. Since your loved one has passed away, you may have quickly realized that there is little of that glory in the duties of an estate executor.

Hopefully, your loved one left an estate that was well prepared, with updated documents, consistency in titles and well-funded trusts. Perhaps it was just a simple will encompassing a modest home and a savings account. All of that would be easy to handle as an estate executor except for the fact that your loved one also left behind debt.

What your loved one owed

Before you can distribute anything from the estate to the heirs, you must attend to your loved one's debts. While it is possible that your loved one left a nice, neat list of those debts and bills -- complete with account numbers, passwords and contact information -- this is not very likely. Therefore, your first task, even before you file to open a probate account, is to itemize the debts of your loved one.

Right off, you may know there is a mortgage, car payment and income taxes. There may also be utility bills and credit card bills. With some digging, you may also find some less common obligations to include on the list, such as the following:

  • Personal loans
  • Student loans
  • Storage fees
  • Cellphone bill
  • Lines of credit
  • Loans taken from life insurance or retirement accounts
  • Condominium or HOA fees

Some bills, such as utility bills, storage fees and the mortgage, should be the responsibility of the estate's beneficiaries until the probate process begins. If the lender agrees, the heir who inherits the house may assume the mortgage. Otherwise, the heir may have to refinance the home to take possession of it.

Any final bills, like a cellphone, credit cards or income taxes can be settled during probate. It will be your duty to discern whether requests for payment are valid. If there is not enough cash in the estate to pay off what your loved one owed, you will decide which estate assets to liquidate to cover the expenses. Such decisions are seldom easy, and they are just one element that can make probate burdensome for an executor. You may find relief with the assistance of an experienced Nevada legal professional.

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