Debt and Probate: What You Need to Know

A sample of last will and testament with a section about debt payment.

Most people have their legacies, properties, and assets on their minds when drafting their Testament and Last Will. But several other things must be considered and specified in an estate plan.

For example, specifying what happens to your outstanding debts or those of a loved one after they pass away is crucial. If you owed a loan or debt in your lifetime, your family will be responsible for paying for it, depending on your estate’s size and value and the type of the loan.

Is it important to notify creditors?

After a person passes away, their estate executor is responsible for informing the person or institution that provided the debt. While the trust doesn’t mandate that the executors notify the creditors of the debtor’s passing away, doing so will allow the creditors to come forward within a shorter period, and the payment process will be smoother. Once the creditors are notified, they are given a specified period to claim their takings against the estate. Each creditor will be paid for their part from the estate’s proceeds.

If the deceased person didn’t create an estate plan during their lifetime, the probate court then assigns an administrator, who is typically from the immediate family or a close relative. Like a trustee or an executor, an administrator appointed by the court is also authorized to pay the deceased person’s debts from the estate’s takings.

What if two persons are responsible for debt?

A sample of last will and testament with a section about debt payment.

In most mortgage cases, couples usually apply together. In this case, the surviving spouse or loan co-signer will be responsible for paying the debts. However, the probate court considers several factors before determining that the living partner should be paying for the joint debts. In some cases, selling the estate is enough to repay all the deceased’s outstanding debts, while in others, loan providers may settle on an amount lesser than the original debt.

 

A loved one’s death isn’t only emotionally turbulent, but it often also brings complicated financial and legal issues with it. An experienced and reliable probate attorney Queens or probate attorney Brooklyn can help you through each step of the process, from contesting and probating the will to removing an executor or administrator, ensuring complete protection of your rights.

If you’re looking for an experienced probate attorney in Brooklyn, Queens, Manhattan, or other NYC areas, get in touch with the law office of Ledwidge & Associates, P.C. today!

Estate Administration: Know What to Do When a Loved One Dies

The emotional turmoil of losing a loved one can make it difficult to focus on finalizing their affairs in the days and weeks that follow. Having a list can make it far easier to complete these probate administration tasks yourself, or divide them among other family members and close friends.

Senior father and his young son on a walk

Before Their Passing

As a relative or close friend, you need to know about their wishes. You should have important information such as funeral, burial, or cremation arrangements, as well as their preferences for organ donation and resuscitation. Knowing whether or not they have appointed a proxy or an advocate in the event that they’re unable to make medical decisions is also vital.

They should inform you about where all of their important documents and items are located. Life insurance policies; their will; keys to any safe deposit boxes; financial statements; and birth, marriage, or divorce certificates are all important items you’ll need to be able to find after they’ve passed away. Finally, they should have drawn up a will and given you a copy.

Immediately Following Their Passing

You will have to get an official pronouncement of your loved one’s death. If they died in the hospital, their doctor can accomplish this. If they died at home and were receiving hospice care, their nurse will be the one to call. If they died at home without hospice care, call 911 and be sure to have their DNR resuscitation document ready.

A Few Days After Their Passing

You’ll need to arrange for your loved one’s funeral and burial or cremation within a few days of their death. Review these estate planning documents and see if they prepaid for their funeral, burial, or cremation. If they were a military member or with a religious or another group, contact them to inquire about funeral services or burial benefits.

The Next Week to 10 Days After Their Passing

You’ll be gathering important documents from various locations in the next week or so. The funeral home can provide you with copies of their death certificate, which you’ll be sending to their insurance company, bank, and government agencies.

You’ll also need to bring your loved one’s will to their county or city office for probate acceptance. Their utility company, pension agency, social security, accountant, bank, and life insurance agent will also need to be contacted.

Couple having meeting with legal advisor

Talk to an Attorney

Even if you’ve completed all of the necessary steps correctly, the reality is that you can be held liable for not following your loved one’s wishes exactly as stated. Or, you may feel too overwhelmed by your loss to complete all of these necessary tasks yourself. Whatever your particular situation, an estate administration attorney can help you figure out what needs to be done.

The lawyers at Joseph A. Ledwidge, PC are strongly focused on probate and estate administration law. With a combined 32 years of experience, we can help you navigate the probate process. Your result matters to us; call (718) 276-6656 to arrange your consultation.