When a person dies, all their possessions such as real estate, money, stocks, personal belongings, etc. become part of their "estate."
The decedent's estate will need to be collected and managed. "Estate administration" refers to collecting and managing the assets of the estate, paying any debts and taxes, and distributing the remaining assets to the heirs or beneficiaries of the estate.
The section below provides helpful links to relevant topics:
The beneficiaries of an estate are determined by will. If there isn't a last will and testament, the heirs are determined by each state's intestacy (which means dying without a will) laws.
FindLaw's section on estate administration basics provides information on how to administer an estate, what being an executor means, and what happens to a person's debts after death.
Without a basic understanding of the estate administration process, the whole experience can be overwhelming. This section offers many resources on estate administration and executors.
All of the things a person once owned make up their estate once they are deceased. Many estates must undergo complex processes and probate proceedings. The process requires someone to be responsible for:
This person is usually called the "personal representative." In some states, they may also be called the "executor" if the decedent died with a will.
The personal representative or executor of an estate may be a person or a company such as a bank. Personal representatives may be nominated by the person who passes away in their will. Although anyone can be a personal representative or executor, that person must perform with diligence and good faith.
Usually, the executor is designated in a will. If the deceased didn't leave a will, an administrator could be appointed by the probate court. Once an executor or administrator has been appointed, they are referred to as the "personal representative."
If the probate process is complicated, the personal representative is entitled to hire an attorney – at the expense of the estate – to help them with the process.
The courts can appoint the person they choose to be the fittest to serve as the personal representative if:
This is usually the surviving spouse or another close family member. In some cases, more than one personal representative will be named. There can also be cases where someone sues the chosen executor.
The personal representative is responsible for:
The personal representative is not entitled to any proceeds from the sale of property of the estate. Generally, however, they are entitled to a fee as compensation for administering the estate.
To gain access to someone's estate, you will need a court order and testamentary letters or letters of administration. These are acquired by petitioning the courts.
The personal representative of an estate ensures a person's last wishes are granted regarding their property and possessions. When drafting a will, the law doesn't require that the executor be a lawyer or accountant. But it does require that the executor fulfill their duties with the utmost honesty and diligence.
Depending on the complexity of the will, the executor of a will has many fiduciary duties.
Some typical duties include:
The personal representative needs to make wise decisions and complete detailed tasks. This can include:
The personal representative inventories the decedent's assets. They must be aware of the date of death and inform the decedent's creditors that they have died.
If there are any debts, their assets may be enough to pay the creditors. They are paid from the estate. Otherwise, the personal representative will need to seek the court's approval to determine who should be paid.
If assets remain after the debts are paid, the remainder of the assets is distributed according to the will. There may be inheritance taxes, estate tax returns, administration expenses, and requirements to probate assets.
Those who do not have a will are called "intestate," and states have different rules regarding how assets are distributed under their laws relating to intestacy. Some small estates may escape probate altogether.
Generally speaking, once a person dies, their debts are paid off from their estate. If there isn't enough money to repay the debt, the debt dies with the person. Relatives or beneficiaries of the will are usually not responsible for paying the deceased person's debts.
However, a relative or beneficiary could be responsible for repaying the debt if they:
For example, credit card debt belongs to the account holder. The co-signor or other account holder would have to pay the debt if:
It's important to note that the surviving spouse may be liable for the debt in community property states – where property acquired during a marriage is considered jointly owned.
In some cases, an estate may need to be administered in more than one state. Generally, the state where the person lived at the time of death is where the estate goes through probate.
However, real estate is governed by state law. Any real estate in another state might have to be probated in that state. Several states have adopted a version of the Uniform Probate Code, designed to simplify the estate administration process and provide similarity among probate laws from state to state.
If you're in charge of administering an estate and have questions about it, you may want to consult with an estate planning attorney. They can also answer questions or concerns regarding the debt left by a person who has passed away.
The links in this article can help you learn more about estate administration. You can find topics about how to administer an estate, the treatment of debts after death, choosing the right executor, the duties of the executor, and much more.
