A loved one named you the executor of her or his estate, and you accepted the role and its responsibilities. You want to learn how to take proper care of the estate and its beneficiaries, which may involve settling debts.
The Federal Trade Commission explains how to tie up loose financial ends for a deceased individual. Learn how to keep debt collectors from asking you or others to pay your loved one’s outstanding debts.
Who must pay the debts?
Usually, surviving family members need not pay a deceased love one’s existing debts with their own money. If the estate lacks the funds to clear the debt, it goes unpaid. Situations in which family members may bear financial responsibility for unpaid debts include when they co-signed a loan with the deceased person, when the deceased’s surviving spouse lives in a community property state and when the deceased person’s spouse lives in a state that requires her or him to pay specific debts.
Who can pay the debts?
As the executor, you must settle unpaid debts. Debt collectors may contact benefactors or family members about unpaid debts rather than talk to you. According to the Fair Debt Collection Practices Act, the only people debt collectors may contact include the parents of a minor deceased person, a spouse, a guardian, an executor and an administrator.
If collectors contact a deceased person’s relatives, they may only ask for contact information for the decedent’s executor, spouse, administrator or someone else with the ability to clear the unpaid debts. Collectors cannot talk about the outstanding debt when they call.
You and your loved one’s family members deserve peace after a significant loss. By knowing how to navigate debts as an executor, you help create and protect that peace.