An estate executor has a variety of jobs when someone passes away. Hopefully, that person has written an estate plan, and it is the executor’s job to carry out the plan. This includes tasks like reading the will, mailing copies of the will to beneficiaries, inventorying the assets in the deceased person’s estate, paying off remaining debts, transferring financial assets to beneficiaries and much more.
One thing that sometimes concerns executors, however, is their obligation to pay debts and taxes. This could include things like credit card bills, property taxes, income taxes, utility bills and much more.
If the executor has to do this, does that mean they are taking on a financial obligation they never agreed to? Perhaps their parent is the one who owes the debt, and the adult child is administering the estate. Do they have to pay their parent’s debt? Does that debt really get transferred down to the next generation?
Estate funds
It does not. The debt is only the obligation of the deceased person and any co-signers. Adult children do not inherit debt and the estate executor is not personally responsible for paying it off.
Instead, the executor uses the estate’s funds to pay off those debts. If the estate doesn’t have enough money, full payment may be impossible. But if it does, the executor has to pay down some of these obligations before they can distribute the remaining assets to the beneficiaries.
This is just one way that being an estate administrator or executor can get complicated. Those involved need to know exactly what legal steps to take.