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Paying Debts of a Loved One

Taxes2

It is one of the last things that anyone wants to do after the death of a loved one, but paying off the debts of the decedent is an important part of probate. Debts must be paid before property can be distributed amongst the family members. Making an error here can present extreme repercussions for all of those involved, particularly the executor (also called the personal representative) of the will, whose responsibility it is to pay off these debts accurately and in a timely fashion. However, the personal representative must also watch out for unfair, deceptive, or illegal debt collecting practices by creditors and scammers. To learn more about your responsibilities as a personal representative and to seek legal aid in this complex and often stressful endeavor, it is best to reach out to an Anne Arundel County probate administration attorney immediately to avoid making mistakes.

The Duties of the Personal Representative are Vast

According to Maryland law, the powers and duties of the personal representative include the following, among others:

  • Receiving and holding assets;
  • Paying funeral expenses;
  • Paying debts or expenses;
  • Paying taxes;
  • Selling real property;
  • Continuing a business; and
  • Employing specialists to advise or assist.

Because the personal representative has so many responsibilities, is it wise to seek legal counsel from the beginning, whether there is a great amount of property to be distributed or not. Paying debts can be one of the most complicated steps, and most trying as well.

Prioritizing Debt Collectors 

Family members are not responsible for paying off the decedent’s debts themselves, and are also protected under the Federal Fair Debt Collection Practices Act, which bars creditors and debt collectors from using unfair, deceptive, or abusive practices. Even as the personal representative, you can request to have a debt collector stop calling you. Furthermore, not all debtors may end up getting paid if there is not enough money in the estate or will. It is important to pay debtors in the correct order of priority: the Internal Revenue Service (IRS), a mortgage company with a secured loan, and an attorney all take priority over a credit card company. Items and assets that are not part of the probate can be distributed to beneficiaries before debtors are paid, and these assets are protected from the potential creditors. 

Call Maryland Probate Attorney Tara K. Frame Today

If it is your duty as the personal representative, or executor, to pay off debts, it is imperative that you talk with an attorney before taking on this responsibility alone. A simple mistake could result in serious consequences, such as a lawsuit for breach of fiduciary duty or negligence. Call the professional Pasadena probate administration attorneys of Frame & Frame today 410-255-0373 for assistance.

Resources:

registers.maryland.gov/main/publications/AdministrationBooklet2015.pdf

ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text

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