What Happens in Probate Court If An Estate is Broke?

After the estate of a deceased loved one goes to probate court, one of the responsibilities of the executor will be to pay off the debts of the estate before dividing the remaining assets among those listed in the Will.  However, in some circumstances, the deceased person dies owing more in debts than they have in assets to pay the debts.

Do Heirs Pay the Deceased Debts?

One of the most frequent questions we get is whether the Deceased person’s heirs are liable for the Decedent’s debts after death.  The short answer:  NO.  Beneficiaries of the estate are never on the hook for the debts of the deceased if their estate cannot cover it. However, this does not extend to spouses or other who may have signed documents agreeing to be liable for the Decedent’s debts while he or she was alive.  For instance, if a sibling of the Decedent co-signed on a car note for the Deceased, then both the Deceased’s estate and the sibling would be liable for the debt.

How Creditors Fight Back

It is natural to assume that any creditors that were owed by your loved one’s estate are not going to pleased that their debts were not satisfied. However, there is typically very little they can do about it. The only way that a creditor can fight back is to file a claim in the probate court seeking to be repaid for their debt.  If some of the creditors do not pursue their debts correctly out of the estate, then their debts may be barred and not paid from the estate.  In that instance, those creditors who properly filed their claims will receive a larger portion of the estate than they might have otherwise.

If this situation arises after the probate process, it is crucial to contact your attorney as soon as possible to prepare a case in order to fight back.

What is Probate?

It’s hard losing a loved one. Grief can reduce us, and make even simple tasks into Herculean efforts. However, when someone dies, that is when the wheels of the law start to turn. Of foremost concern to the family of the deceased is probate, which is the process of making sure a Will is genuine, and then following through on the contents of that Will.

According to The Free Legal Dictionary, the probate process is fairly straightforward. When someone dies, their case goes to a probate court.  If there was a Will, then that Will is entered into evidence, examined, and if found to be both legal and genuine then the instructions in it are typically followed. If someone dies intestate (a term that means they died without a Will to explain their desires for their property) then someone is assigned to deal with that person’s estate according to the laws of descent and distribution.

When it comes to a Will, anyone who has possession of the Will is expected to produce it and provide it to the probate court. This responsibility is typically handled by the deceased’s lawyer, but they are not the only people allowed to do this. Once it has been validated by the probate court, the Will is considered a legal document, and its instructions are followed. A unprobated Will is meaningless, in a legal sense.

Going through the probate process, especially when you’re still grieving, can be difficult. If you need assistance, or representation, all you have to do is contact us today!