Your parents recently passed away, and you were named as the estate executor. You know that means that you have some obligations, such as providing copies of the will to people who need to receive one, inventorying the assets that your parents owned and working to distribute those assets correctly.
But your parents didn’t just leave assets behind. They also had some outstanding debt. Perhaps they just had minor debts that they hadn’t taken care of yet, such as property taxes, income taxes, credit card bills, final utility payments, and the like. Or perhaps they had other types of substantial debt, like outstanding student loans, excessive credit card debt or a home mortgage.
As the estate executor, it is your job to pay the debts that the deceased leaves behind. But does this mean that you have to pay personally?
You pay out of the estate?
The good news is that you are not personally responsible for any debt that your parents took out alone. You would only be responsible if you were a cosigner on their loan.
You do have to pay the debt, but this means that you are supposed to use the money from their estate to pay it. For instance, the estate plan may tell you to distribute your parents’ financial assets equally between all of their children. You can do this, but you generally need to make all of those final payments first and then distribute the money that remains.
This process can become a bit complicated, especially from a financial perspective. Make sure you know what steps to take.