An estate executor is simply the person that handles the estate in accordance with the plan that the deceased made before they passed away. They do things like gathering up assets and distributing them to family members.
One of the roles that the estate executor has is to pay debts and taxes. But what if the deceased passed away with more debts than anyone realized? Does the executor then have to pay these debts out of their pocket or are the other family members required to pay these debts in some way? Who is responsible?
The executor pays out of the estate
It is true that the executor’s job may be to pay back these debts and square everything up with the taxes, but they don’t have to do it out of their pocket. They’re not financially obligated, and neither are the other heirs, in most cases.
Instead, the executor is supposed to use the funds from the estate to pay these debts. They take the money that the person left behind, pay off what is owed, and then distribute any remaining money in accordance with the will.
This may mean that a person who did not do excellent estate planning has listed out unattainable amounts of money in the will. Many of those debts and taxes do have to be addressed first, and heirs may then receive fewer assets than they believed they were going to get. But they never have to go into their own savings unless they co-signed on that debt.
If you’re involved in this process and it’s become complex and difficult to sort out, make sure you have an experienced team on your side. You need to know exactly what steps to take to protect yourself and take care of your responsibilities.