In an estate plan, the executor is the person who is in charge of carrying out a person’s final wishes as stated in the will. For instance, the will may list which beneficiaries should get which assets, and then it is the executor who gathers those assets and ensures that they go to the right people.
However, an estate contains far more than just assets. The person who passed away may also have a substantial amount of debt, and those creditors may want to be paid. Is it the executor’s job to make these payments?
The executor pays out of the estate
It is true that the estate executor is the one who handles this debt. Just like the way that they have to pay taxes, they may need to pay other debts that are still owed by this estate.
The key point to remember, however, is that the executor doesn’t have to personally make any of these payments. They just take the money that is needed out of the estate. They’re in charge of the distribution, but they are not personally liable for any of the debts, even if the person who passed away was their parent.
This may mean that all the debts can’t be completely paid if the estate just doesn’t have enough assets to cover them. Even in a situation like that, the executor is never expected to come up with extra money or take any other steps to cover the remaining debt.
Setting up a plan
Estate planning can get very complicated, and it’s important to have a plan that addresses all of these potential issues. Be sure you know exactly what steps to take and what legal options you have.