Debts |

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.

When it comes to probate, you typically are advised to avoid it if at all possible. This is true as a general rule because the probate process can be time-consuming, expensive and it opens your private matters up to the public. However, there are certain situations when it may be beneficial to allow some of your estate to go through probate.

If the estate has a large number of creditors, a probate may be helpful. When a probate case is filed, creditors are then given notice of the filing for probate and a deadline for asserting their claims against the estate. Thus, if the deceased owed large sums of money at the time of his or her death, it can be beneficial to have a time limit for creditors to file their claims. If a creditor fails to properly assert a claim, it can be barred from asserting its rights to collect the debt at a later date.

In comparison, if you have placed your assets into a trust to avoid the probate procedure, creditors are not limited by the probate law and the deadlines provided therein. However, in Utah there is a method provided for Trusts to do a similar procedure to limit claims against the decedent’s trust. With proper planning, it is possible to take advantage of a trust while also using the probate process for protection. This strategy requires advance planning and the assistance of an experienced estate planning attorney. Once the creditor’s notices are finished, your estate should be secure. Your family has the comfort of knowing that the remaining property held is protected from future claims of your creditors.

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