How Does an Executor Acquire Debts Owed to the Deceased?

A person may have lent money to a family member or close friend with the promise of getting a return. Or, they may have owned property they rented out to others for a cost. Whatever the specific case might be, this person may unfortunately pass away without being fully compensated for their service. And if you are the named executor of this person’s Last Will and Testament document, you must act on their behalf to get this reimbursement. With that being said, please read on to discover how an executor is supposed to acquire the outstanding debts owed to the deceased and how a seasoned estate planning attorney in Putnam County, at the Law Office of Andres D. Gil, PLLC, can work to ensure these financial matters are settled effectively.

How does an executor discover if the deceased is owed money?

First of all, as an executor, you must understand that a debt does not die with the deceased. Rather, their estate becomes the creditor for these outstanding debts. And with being the manager of this estate, it is thereby your responsibility to track down the rest of the funds owed to it. To execute this effectively, you should go over all of the deceased’s financial records or transaction histories. Hopefully, within their Last Will and Testament document, they left specific instructions for where and how to access this information. Also, ideally, you may recover written loan agreements and similar legal contracts that identify the type and amount of debt outstanding, the parties involved in the borrowing, and the terms and conditions of its repayment.

How does an executor acquire outstanding debts owed to the deceased?

Once you document the existing outstanding debts owed to the deceased, you may begin reaching out to the relevant debtors. Specifically, you may send a formal written notice that reports on the passing of the deceased. Within this notice, you must also explain how the deceased’s estate is the new creditor of the loan, and how, effective immediately, payments are to be made to the estate. That is, they may send these payments to you, the executor, as you may handle them within the estate accordingly. So, you may use these funds to pay off the deceased’s personal debts. Or if they have no outstanding debts, you may distribute this money amongst their named beneficiaries, at the time and in the manner set out in their Last Will and Testament.

In an instance where a debtor refuses to view the estate as the new creditor and uphold their end of the loan agreement, you may need to act on the deceased’s behalf and initiate legal action. This may be through a demand letter or even a lawsuit. But at the end of the day, you must believe that these legal costs are worth it, for the beneficiaries’ sake who were promised a certain inheritance. If you need help preparing for this upcoming legal proceeding, turn to a competent estate planning attorney in Putnam County. We at the Law Office of Andres D. Gil, PLLC, have gone through this countless times before, and we are ready to go through it again to support you.