Death, Debts and Probate: Do All Debts Have to be Paid through Probate?

  1. Probate
  2. Death, Debts and Probate: Do All Debts Have to be Paid through Probate?

One aspect of an estate’s responsibilities that probate administration handles after the death of a person, is paying all estate taxes and debts. But does that mean that all debts have to be paid through probate?

No.

In today’s post we’ll look at death, debts and probate administration.

Who Must Pay Decedent’s Debts?

Generally speaking, when a person dies, his or her debts are paid through his/her estate. In other words, the decedent’s estate is responsible for paying decedent’s debts. This fact may come as a relief to many relatives.

There are exceptions to this rule of course.

Some of these exceptions include:

  • state law which may require a spouse to pay certain debts
  • anyone who has co-signed a loan, and
  • debts incurred as community property.

In instances where none of these (or other) exceptions apply, it is the estate that is responsible for paying the debt. If there is not enough money in the estate to pay the debt, then it simply goes unpaid.

Some Debts Can Be Avoided….

Florida probate law provides that, whether or not letters of administration have been issued, and regardless of whether a probate has been opened, a decedent’s debts can no longer be collected upon two (2) years after decedent’s death.

This two-year limitation cuts off a creditor’s rights to bring an action against a decedent’s estate to collect upon a debt. And it does not matter whether the debt has already accrued or not. If the decedent has been dead for 2 years (and the creditor did not otherwise take steps to preserve his/her claim) the debt will not be paid.

In a sense, you can look at this 2-year limitation on collecting debts against an estate as a form of bankruptcy relief for decedents.

(There is a lot more to this, of course, especially if you are a creditor, so if you want to know more, please consult with an experienced estate and probate lawyer.)

Death and Taxes

As the old saying goes, you can’t avoid death or taxes. That rule about taxes holds true when it comes to the 2-year limitation rule above because it does not apply federal taxes. Which means, whenever the IRS comes calling (or any other federal agency for that matter), no matter how long decedent has been dead, the estate will need to pay back taxes.

If you have questions or concerns or want to know more, reach out to an experienced estate and probate lawyer.

Protecting Your Family is Just a Phone Call Away.

Don’t leave planning for your future and that of your loved ones to chance. All it takes is one phone call to the Law Offices of Samantha J. Fitzgerald to ensure that your wishes will be followed, and your loved ones taken care of when you are gone. We expertly guide individuals through the complex probate process, and capably handle all aspects of the creation, administration, and settlement of trusts as well.  When you work with the estate planning attorneys at the Law Offices of Samantha J. Fitzgerald, you get more than just an estate plan: you get peace of mind. Call us at 954-580-3690 or email us at: [email protected] today.

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