How To Deal If You Are The Personal Representative Of An Insolvent Estate
High prices and the economy seem to be here to stay. Millennials probably will never be able to afford to retire, which means that some of them will be living paycheck to paycheck when they die. Therefore, insolvent estates are likely to become more and more common as the last generation to own substantial amounts of property free and clear dies off and their children burn through their inheritance quickly just to make ends meet. If you think that trying to pay off your own debts is stressful, at least you are still alive to continue earning money. Trying to settle the estate of someone who racked up debts in excess of the value of his or her assets is even more difficult. If you are the personal representative of the estate of a family member whose finances were in disarray, contact a Tampa probate lawyer.
Don’t Shoot the Messenger
The key to success in probate is to commit to not taking anything personally. Your goal is to follow the law and the instructions in the decedent’s will. When a family member does not inherit as much of the estate as he or she would have liked because the decedent willed more property to other beneficiaries or because the decedent had outstanding debts that you had to satisfy before settling the estate, you get the blame for it, even though you did not create this situation.
Whether your relatives like it or not, creditors get the first pick of the estate. You must publish a notice to creditors and contact known creditors as soon as the estate opens for probate. After the end of the legally specified period in which creditors may come forward, you must pay or settle the debts. This may require selling assets belonging to the estate if there is not enough cash to settle the debts.
Which Creditors Get Priority When the Estate Doesn’t Have Enough Money to Pay All of Them?
An estate is insolvent if its debts exceed the value of its assets, in other words, if there is nothing left for the heirs to inherit after the personal representative pays the estate’s debts. At this point, probate is not a battle of heir versus heir or heirs versus creditors, but rather of creditor versus creditor. In general, the debts get paid in the order in which the creditors responded to the notices you issued at the beginning of probate. If multiple creditors have responded and there is not enough to pay all of them, you may need to negotiate to settle the debts for a lesser amount than the creditors originally requested. Insolvent estates are one of the situations where you need a probate lawyer.
Contact David Toback With Questions About Insolvent Estates
A Central Florida probate lawyer can help you settle a deceased family member’s estate when the estate is insolvent. Contact David Toback in Tampa, Florida to set up a consultation.