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There are many debts that the deceased can leave behind. It is part of the estate trustee’s responsibility to ensure that these debts are paid from the assets of the estate.

These debts can take the form of funeral expenses, mortgages, credit card or bank loans or taxes, for example. When the assets from the estate are sufficient to cover the debts, the trustee ensures these are paid and the remaining assets are distributed to the beneficiaries.

However, there is an obvious problem when an estate does not have the necessary funds to cover the outstanding debts. What happens then? Does the family of the deceased inherit the debts they accumulated while alive? No. The trustee and the beneficiaries do not inherit the debts that belonged to the deceased, unless they were jointly liable for the debt, they were a guarantor of the debt, or had somehow been responsible for the debt. However, the estate may be declared insolvent.

The estate trustee must take care, however, not to distribute assets to beneficiaries before satisfying estate debts. One way they can ensure this is done is to advertise in a local newspaper in the area that the deceased resided or operated a business. The trustee can invite creditors to contact them for any outstanding accounts within a specified amount of time. As a rule of thumb, the trustee should advertise at least three times, and allow at least thirty days to be contacted. This way, the trustee protects themself so that they are not liable for any debts. It is important to note that if creditors are not satisfied before assets are disbursed, they may attempt to claim the inherited funds from the beneficiaries.

If you would like more information regarding estate debts, liability to creditors or any other estate concerns, please contact Andrea Kelly.


Andrea Kelly, Lawyer, has extensive experience in wills, trusts, powers of attorney and estate administration matters.  She provides clients with a high standard of timely professionalism and expertise, incorporating a very thorough fact finding process.  This is quite often enlightening for her clients and facilitates individually tailored services.  If you would like to know more, feel free to use the easy contact form or read Andrea’s bio.


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