Monday, July 3, 2017
Generally, when testators begin drafting a will, their main consideration is how their assets should be distributed. Concerns with outstanding debts are usually pushed to the side or not considered. Most of the time, this is not much of an issue. If a decedent passes with only minor debts, then the estate can pay it off without too much ado. If there are substantial sums owed to creditors, then the executor of the estate will be responsible for appropriately reducing assets to cover any existing debt. In some cases, highly prized or beloved assets intended to go to a specific beneficiary may end up being sold to pay outstanding liabilities. Because the law requires an estate’s assets to be distributed in a particular order, it is best to subtract what is owed before writing specific promises into a will. This makes it less likely that a beneficiary expecting a significant windfall sees their inheritance mitigated or abrogated by debt.
See Susan Willett, Use Your Will To Specify How To Handle Debts, WilmingtonBiz Insights, June 30, 2017.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.