What To Do When The Estate Comes With Debts?
November 22, 2011
The importance of estate planning is too often realized after the death of a family member. Even in Palm Beach, Florida, there are many cases of heirs getting the surprise of their lives and wishing they had persuaded their loved one to look into proper estate planning before it became too late.
The two main downsides of not doing so are the possibility of a long delay in receiving one’s inheritance or the much worse consequence of inheriting debts. Because of the economic situation in Florida, more and more families are learning the importance of proper estate planning. It’s also important for parents and grandparents to know exactly what they have and what they owe. No one wants to burden their family with debt.
For example, if a deceased relative leaves you a house, but it turns out it’s worth less than what is owed the bank, the beneficiary may be faced with making the mortgage payments or selling the house.
The same is true of inheriting an automobile or any other asset that was financed by the deceased. The estate might also be liable for credit card bills, back income taxes and any other debts owed at the time of death. The assets of a seemingly wealthy person can be more than offset by such obligations. But additional problems arise when there is not enough money in the estate to pay outstanding obligations.
Estate planning is a complicated process and the relevant laws vary from state to state. Although it might seem too easy to put off, taking care of it now is far better than when it’s too late to plan for it. Anyone considering estate planning should consult a lawyer familiar with Florida law. The best advice may be to not put off until tomorrow what can be done today.