If you have recently lost a loved one, you may be wondering who is responsible for paying his or her debts. The good news is that nobody is personally liable for another person’s debts (unless you were a co-borrower or co-debtor with the decedent). The law provides that the creditors of a deceased person must be paid out of his or her estate before any distributions can be made to the heirs. This may include selling assets of the decedent in order to pay outstanding debts. Thus, if you take property from the decedent’s estate before all of the debts are paid, you may be liable for paying creditor claims. However, there are some exemptions that allow assets to be distributed to heirs of the Estate even though creditors don’t get paid.
Utah law sets forth the order of priorities for a decedent’s debts as follows:
- Reasonable funeral expenses up to $6,000.
- Administrative costs and fees, which includes paying the personal representative’s fees and the fees for the estate attorney.
- Debts and taxes
- Reasonable and necessary medical expenses from last 60 days of the decedent’s last illness.
- Family allowance for necessities.
- Child support arrearages.
- Debts acquired by continuing decedent’s business after his or her death.
- All other claims.
After satisfying all prior classes, a class of creditors shall be paid pro rata based upon the claim amounts if there are insufficient estate assets remaining to pay the class in full. Once the debts have been paid, the estate can make distributions to the beneficiaries.
If you have been appointed to administer a loved one’s estate, we can help. We will assist you in not only fulfilling your legal obligations, including paying the debts of the decedent, but we will also help you avoid any legal issues or personal liability.
The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.