Is the Executor Responsible for Estate Debts?
Is the executor responsible for estate debts?
The short answer is no, unless you screw up.
Let me explain.
Generally, estate debts are only payable from estate assets.
However, if you don’t account properly and end up short, you may have to make up the difference out of your own pocket.
Let me give you an example.
You’re the executor of an estate that has $100,000 in cash.
You don’t think there’s any debts, so you distribute all of the money to the nieces and nephews, who are so happy.
Later, you get hit with a tax bill that you didn’t expect for $20,000.
When you ask the nieces and nephews to refund parts of their inheritance so you can pay the taxes, guess what?
They stop returning your calls.
So yes, in this unfortunate scenario, you would have to pay the difference.
It’s because of situations like these that more and more folks are turning to us to serve as professional executor for their estate.
Hope you found this helpful. Take care now.
[Previously posted on YouTube]