How Debts and Creditor Claims Are Handled During Probate

Probate is not only about distributing assets. It also involves settling the financial obligations left behind. Handling debts correctly is one of the executor’s most important responsibilities.

Notifying Creditors

Executors are legally required to notify known creditors of the death. In many cases, a public notice is also published to alert unknown creditors. This begins a limited time period during which claims must be submitted.

Types of Debts That May Appear

Common estate debts include:

• Medical expenses

• Credit card balances

• Mortgages or home equity loans

• Personal loans

• Income and property taxes

Not every bill presented is automatically valid.

Reviewing and Paying Claims

The executor reviews each claim to ensure it meets legal requirements. Claims that lack documentation or fall outside the allowable time period may be denied.

Valid debts are paid using estate funds, not personal funds of the executor or beneficiaries.

When the Estate Cannot Pay All Debts

If estate assets are insufficient, state law determines the order in which debts are paid. Beneficiaries typically receive distributions only after debts and expenses are resolved.