Founding Attorney
When a loved one passes away, the last thing most families want to think about is debt. Unfortunately, managing outstanding debts is an essential part of the probate process. Before any inheritance can be distributed, the estate’s debts must be settled during the probate process. If you’re serving as an executor or personal representative, here’s what you need to know.
The Executor’s Responsibility
One of the executor’s primary duties during probate is to gather information about the estate’s debts and settle them appropriately. This means:
- Identifying what debts exist
- Notifying creditors
- Paying valid claims out of estate assets
- Defending against invalid or excessive claims when necessary
You are not personally responsible for the deceased person’s debts unless you co-signed a loan or guaranteed a debt yourself. However, you do have a legal responsibility to manage and pay the estate’s obligations correctly.
What Types of Debts Are Common in Probate?
Some of the most common debts you might encounter during probate include:
- Mortgage loans
- Credit card balances
- Car loans
- Medical bills
- Personal loans
- Utility bills
- Taxes owed (income tax or property tax)
It’s essential to be thorough when gathering information. Overlooking a debt can cause delays or even lead to legal challenges later.
How Creditors Are Notified
Under Texas law, executors must notify known creditors about the probate proceedings. This usually involves:
- Sending a formal notice to known creditors directly
- Publishing a notice to creditors in a local newspaper for unknown creditors
This gives creditors a set period to file claims against the estate, usually four months from the date of publication.
We can assist you with preparing the notices properly and making sure all deadlines are met.
How and When Debts Are Paid
Not all debts are paid immediately. Texas law sets an order of priority for paying debts during probate. Generally, debts are paid in the following order:
- Funeral expenses and costs of administering the estate
- Secured debts (like mortgages)
- Taxes owed to the government
- Unsecured debts (like credit cards and medical bills)
Debts are paid from the estate’s assets, not from your funds. If there are not enough assets to cover all debts, some creditors may receive only partial payment — or none at all — depending on the estate’s size and the type of debt.
If the estate is insolvent (meaning debts exceed assets), it’s very important to follow the correct process to avoid personal liability.
What Happens If Debts Are Disputed?
Sometimes, you may believe a creditor’s claim is invalid or too high. As executor, you have the right to:
- Request additional documentation
- Negotiate with creditors
- Challenge the claim in probate court if necessary
Handling disputes the right way protects the estate’s assets for legitimate heirs and beneficiaries. Our firm can represent you in these matters and help defend against improper claims.
What About Community Property Debts?
Because Texas is a community property state, some debts acquired during a marriage are considered joint debts. This can sometimes create confusion during probate.
Generally, the surviving spouse is not personally liable for the deceased spouse’s debts unless they signed for them. However, community property may sometimes be used to satisfy the debt. We’ll help you determine how Texas community property laws affect the estate.
How We Can Help With Debt Management During Probate
At the Law Office of Carey Thompson, we guide executors and personal representatives through every step of probate, including managing debts and protecting estates from unnecessary losses. When you work with us, we can:
- Help you identify and notify creditors properly
- Assist with publishing notices in compliance with Texas law
- Advise you on which debts must be paid and in what order
- Challenge invalid or excessive creditor claims
- Protect you from personal liability during the process
We’re proud to serve the Fort Worth community with clear, practical advice during what can be a difficult time.
Make Sure the Estate Is Handled Properly
Dealing with outstanding debts during probate can feel overwhelming, but you don’t have to figure it out alone. If you need help managing an estate’s debts, contact the Law Office of Carey Thompson in Fort Worth today. We’ll help you move through probate with confidence and peace of mind.