An Estate fiduciary such as an Executor or Administrator is responsible for settling a decedent’s estate. A New York City estate lawyer often refers to Estates Powers and Trusts Law (EPTL) Section 11-1.1 which is entitled “Fiduciaries’ powers”. Among the authority provided by the statute is the power to settle claims against a decedent’s estate. The payment of estate creditors is a primary obligation of the fiduciary which must be completed before any distributions can be made to beneficiaries. If a fiduciary distributes estate assets to beneficiaries before satisfying creditor’s claims, the administrator or executor may be held personally liable to satisfy those debts if the estate does not have sufficient assets remaining on hand to do so.
It is very common for a person to die with unpaid debts or creditor claims. The most common types of unpaid items include credit card balances and mortgages. In a recent article posted at MarketWatch.com by Christine DiGangi dated May 29, 2017 entitled “What happens to your debt when your die?”, it was reported that 73% of decedents had some type of debt at death. Continue reading