Settling an estate involves more than just distributing assets to heirs. It also requires addressing outstanding financial obligations such as loans, medical bills, and credit card balances. Fortunately, your Des Moines, IA probate lawyer can help you through your next steps. At Law Group of Iowa, we have over 17 years of experience with estate planning and probate resolution. Read on to see how to handle debts that have been left behind, and contact us today to see how an estate settlement lawyer can help.
Identifying All Outstanding Debts
The first step in handling debts is to identify exactly what is owed. Your Des Moines probate lawyer can help you review bank statements, mail, and other financial records to gather a complete picture of the deceased’s financial situation. Common debts include mortgages, personal loans, unpaid taxes, and medical expenses. It is also important to check for automatic payments or recurring charges that may still be coming out of the deceased’s accounts.
Communicating With Creditors
Once you know what debts exist, the next step is to notify creditors of the individual’s passing. Many creditors will pause collection efforts once they are informed, giving you time to address the situation through the probate process. Providing a copy of the death certificate and identifying yourself as the estate representative can help streamline this step.
Determining Which Debts Must Be Paid
Some debts, such as secured loans like mortgages or car loans, are tied to specific property. If these debts are not paid, the lender may have the right to repossess the property. Other debts, such as credit cards or personal loans, are considered unsecured and are generally paid out of the estate’s remaining assets. Your will and trust lawyer can help you understand the order in which debts must be paid and how state laws affect the process.
Using Estate Assets To Pay Debts
Debts are typically paid using the assets of the estate before any distributions are made to heirs. This may involve using funds from bank accounts, selling property, or liquidating investments. It is important to track these payments carefully, as you will need to provide a full accounting during the probate process. If the estate does not have enough assets to cover all debts, some creditors may not be fully paid. In this case, state law will determine how the remaining funds are divided among them. Family members are generally not personally responsible for the deceased’s debts unless they co-signed a loan or are otherwise legally obligated.
Resolving Disputes Over Debts
Sometimes, creditors or family members may disagree about how certain debts should be handled. These disputes can delay the settlement process and add stress for everyone involved. In cases where disagreements cannot be resolved informally, a court may need to intervene. Working with your Des Moines probate lawyer throughout this process can help protect the interests of the estate and keep the settlement moving forward.
Moving Forward With Confidence
Dealing with debts during an estate settlement requires patience, organization, and an understanding of the legal process. At Law Group of Iowa, we’ve helped families with probate, wills and trusts, and more. Now, we’re ready to help you. Contact us today, and see how an executor lawyer from our office can make this whole process easier for you.
