In my last blog post, I related how we often meet with prospective clients who are reluctant to serve as an estate fiduciary for fear that they may become responsible for the debts of the decedent. The blog post led to my legal assistant sharing with me an online article from MSN Money that highlighted some other issues that arise when dealing with the creditors of a decedent.
I would like to highlight some of the ten items outlined in the article. The first issue is to determine if another party may be responsible for the debt. Creditors in Ohio have six months from the date of death to present a claim against an estate. However, a party who is jointly obligated with the decedent will be responsible for the debt as well.
Family members should direct creditors to the Executor or the Administrator of the Estate, or their counsel. Debt collectors for creditors are trained to attempt to get other family members to assume debts of the decedent. There are also state laws that outline the payment priority for various types of debts. It is better for one person to coordinate the repayment process than having many family members involved.
Patience in the payment of creditors is also valuable. State laws outline the procedures for payment of creditors and what needs to be done when there are insufficient assets to satisfy all debts. In Ohio, Revised Code Section 2117.15 outlines the structure for an insolvency proceeding. Each County Probate Court may have different forms and procedures in insolvent estates. It is also a good idea to be patient with the distribution of estate assets, including tangible personal property. No asset should be distributed until all debts have been paid or secured to be paid.
Finally, the best advice suggested in the online article is that if you are in doubt, seek out the advice of your attorney. It is a better course of action to direct questions to your attorney first, than to take action and make a mistake.