Russ Cook & Associates, PC

Estate administration includes dealing with debt

In many circumstances, when people die, they intend for their children to inherit their belongings. In fact, they may believe this happens automatically and that the children can simply move into their homes and take possession of their belongings. This rarely happens unless an estate has been carefully and legally prepared before someone's death. The deceased's property must pass through estate administration before heirs can claim it, and if the deceased left behind any debt, those creditors get first consideration.

After death, a person's estate goes through Tennessee probate, which is the legal process of establishing the scope of one's estate and the validity of any heirs. An executor of an estate, either chosen by the deceased or appointed by the court, is responsible for settling any unfinished business, including dealing with debt. Some loans may include insurance policies to cover any outstanding balance, and some debts may be paid off from the estate. However, other obligations may fall squarely on the shoulders of the heirs.

For example, an heir inheriting a house that still has a mortgage or equity loan due will likely have to take over the payments or sell the house to satisfy the lender. The same may be true for a car loan if the estate cannot cover the balance. Credit card companies are among the last to receive payment from an estate, and if it is not a joint account, any debt not covered by the estate simply goes unpaid. In certain circumstances, the responsibility for a student loan may pass to a surviving family member.

Dealing with the varying and complex laws of debt payment from an estate can be complicated and confusing. Someone who is charged with the estate administration of a loved one may feel overwhelmed with the responsibility. Fortunately, a Tennessee estate planning attorney can assist an executor in those duties to ensure the estate passes through probate as smoothly as possible.

Source:, "This Is What Happens to Your Debts After You Die", Accessed on July 16, 2017

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