Most people will pass away owing money to someone. It is unavoidable in America's credit based economy.
Those debts we still have do not simply disappear when we die. Instead, they must be paid out of the assets of our estates, before anything is distributed to our heirs.
Most of the time this does not create substantial problems, since the debts of a deceased person are fairly small relative to the total assets of the estate. However, some people do carry very substantial debt loads.
This death debt load can create problems for heirs and executors, as the Wills, Trusts & Estates Prof Blog explained in "Use Your Will To Specify How To Handle Debts."
Large debts can leave executors scrambling to figure out which estate assets to sell to pay off the debts. Heirs who thought they might receive a particular asset or a specific amount of money, might be disappointed to have the asset sold or to have their inheritance reduced to pay off the debts.
One way to avoid these potential problems is to specify in a will exactly how your debts should be paid and to do so, before listing how your assets should be distributed to heirs.
It is easier for heirs to accept that they will not inherit something because of debt, if a will never states that they should have it in the first place.
Specifying how to handle your debts also makes handling them much easier for an executor.
If you have large debts and would like to incorporate handling them into your will, visit a Cincinnati estate planning attorney for advice about how to do so.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference: Wills, Trusts & Estates Prof Blog (July 3, 2017) "Use Your Will To Specify How To Handle Debts."