What debts are paid out of an estate?
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What debts are paid out of an estate?
I do not have specific numbers, as my stepmother is handling the finances, but I would like to be informed. My grandmother passed away 2 years ago. Her estate was in probate with my father set to inherit a quarter of it. He passed away suddenly a year ago. Now, her estate has been sold, and the portion due him coming in (not much, maybe 10k). However my father re-married 4 years ago. When he did he had a lot of debt, including student loans. Most of these have been in default for some time now as he was unemployed due to illness. What would still be owed and have to be paid out of the estate?
Asked on April 26, 2011 under Estate Planning, Maine
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
I am so sorry for your loss. I think that you mean that your Grandmother's estate has been settled, correct, meaning that it has been finalized and the money is to be distributed. Your Father's estate is to receive about $10,000. As for your Father's estate - as with all estates - the debts of the person that has died are to be paid before any of the proceeds of the estate are to be distributed. So the money the estate of your Father is to receive from the estate of your Grandmother is an asset of the estate which should be used to pay off his debts. It is possible to negotiate the debt of the estate or for the estate to file bankruptcy if the debts are larger than the assets. But you would have to talk to an attorney who can look a the big picture. Good luck.
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