What Happens to My Debts When I Die?
While you may still possess significant amounts of debt, you may have a comprehensive plan and schedule for dutifully paying them off. However, you cannot predict nor control when you are going to sadly pass away. So, your passing may happen at a time when your debts are still left unpaid. Understandably so, you may not want to place this undue burden on somebody else, especially your close loved ones who are already mourning during this difficult time. If this worry is at the top of your mind, please continue reading to learn what happens if you die with outstanding debts and how one of the experienced Butler County estate planning & probate attorneys at Heritage Elder Law & Estate Planning, LLC can help your loved ones in this aftermath.
What happens to my outstanding debts when I die?
When the time comes that you unfortunately pass on, you may leave behind what is considered to be your estate, which is made up of your money and property. Well, hopefully, you were able to establish a Last Will and Testament in which you appointed an executor to manage and distribute your estate at this time. If not, the Pennsylvania probate court may assign an individual with this duty on your behalf. In short, your estate executor may be charged with using your outstanding money and property to pay off any and all of your outstanding debts.
If this way, your loved ones may not have to carry the burden of paying these debts with their own, hard-earned money and property. However, this may mean that, as your beneficiaries, they may receive less of the money and property you promised to them in your will document.
What happens if I do not have enough assets to pay off my debts?
It is understandable for you to assume that you have enough time to earn enough money to pay off your debts. But to reiterate, there is no telling when your last day will be. Therefore, there is the possibility that you pass on without having enough money and property within your estate to cover your outstanding debts.
In this predicament, your estate may be considered insolvent; meaning, your debts may not be paid in full. With this, your outstanding creditors may have one year from the publication of the Notice of Administration to file claims against your estate. Ultimately, some of your outstanding creditors may only receive a portion of what is owed to them or nothing at all. Yet, you may rest easier knowing that your loved ones may still not be held responsible for paying off these debts under these extenuating circumstances.
As someone crafting an estate plan while experiencing debt, there is nobody better you can turn to than one of the skilled Butler County estate planning & probate attorneys from our firm. So please, call us at Heritage Elder Law & Estate Planning, LLC as soon as possible.
