An estate in New York is administered by an Executor or Administrator. These Surrogate’s Court appointees have a fiduciary obligation to collect the decedent’s assets and also to resolve or pay all estate debts and obligations.
It is not always easy when a person dies for the estate fiduciary to determine the nature and extent of the decedent’s debts. There may be a period of time after death when the decedent’s mail and other information needs to be reviewed to see what credit cards, medical bills or mortgage payments are outstanding. The administrator or executor must determine and resolve all of these obligations before the estate can be settled and the net estate funds can be distributed to the estate beneficiaries. If the fiduciary distributes estate assets to beneficiaries before estate claims are resolved, the fiduciary may be personally liable for the payment of these items.I have represented many executors and administrators in estates where the decedent has outstanding debts. One common question and concern that fiduciaries have is whether they are personally liable for these items. Generally, a fiduciary is not personally responsible to pay a decedent’s debts unless the fiduciary acts irresponsibly and does not ensure that all claims are resolved before the estate is settled.
The New York Probate Lawyer Blog has posted many articles regarding the settlement of an estate. As discussed, a person may die and have many different types of debts. A recent article appearing in MarketWatch on May 29, 2017 entitled “What happens to your debt when you die?” written by Christine DiGangi, notes that persons who died had credit card debt, mortgage balances, unpaid auto loans, personal loans and student debt.
Since creditor’s claims need to be finalized before the estate can be distributed, estate assets may need to be sold to provide the funds to satisfy these claims. Sometimes there may be a dispute as to the amount or the validity of a claim. In these instances, there may need to be Estate Litigation in the Surrogate’s Court or other Courts to determine if a debt or claim needs to be paid. These disputes can be time consuming and costly.
Sometimes, the resolution of the debts and claims can occur in the estate Accounting Proceeding. The Accounting Process is a separate Court proceeding where all aspects of a decedent’s affairs can be reviewed and settled including the finalization of the decedent’s outstanding financial obligations.
Settling an estate can be complicated particularly where third parties have financial demands against a decedent’s assets. I have represented many estate fiduciaries and claimants regarding these claims and have been involved in Surrogate’s Court cases where these issues have been resolved. Call me now for a free review if you have a question or concern regarding estate debts or administration.
New York Probate Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to estate accountings and estate settlement in Manhattan and Queens County and other New York Counties. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.