Being an Executor of a Estate: Part II
This one has to do with debts of the deceased.
Debts come out of the estate. If the family is willed $10,000 and there is $5,000 in credit card debt, the family is getting $5,000. That's an oversimplification, but the principle is the same.
Debts do not disappear if someone dies. Credit card companies still expect their money. Yes, some will write it off. Some will not. In my mother's case, one did, two did not, so out of the meager remainder from her life insurance and sale of her house, I had to pay those creditors. The creditors cannot come after the heirs, however, unless they are cosigners on the cards or loans. (Yes, I know, you can say that the life insurance was for the beneficiaries, not the creditors, but there wasn't enough out of the house sale to pay the creditors, and I didn't want to go to court over it.)
Related to debt is mortgage. My mother had a reverse mortgage. While that is a subject unto itself, most people don't really know what those are or what they do. When I sold my mother's home, almost all of the purchase price went back to the reverse mortgage company because she had taken "loans" out of it over the years. Little was left, plus the house did not bring as much as it should have; I don't think that was a good period for real estate and the area was not in high demand. I do not recommend reverse mortgages based on my experience, but I suppose for some elderly they are good choices. Just be sure you know what you are getting into beforehand, whether executing the estate with one or obtaining one.
Debts come out of the estate. If the family is willed $10,000 and there is $5,000 in credit card debt, the family is getting $5,000. That's an oversimplification, but the principle is the same.
Debts do not disappear if someone dies. Credit card companies still expect their money. Yes, some will write it off. Some will not. In my mother's case, one did, two did not, so out of the meager remainder from her life insurance and sale of her house, I had to pay those creditors. The creditors cannot come after the heirs, however, unless they are cosigners on the cards or loans. (Yes, I know, you can say that the life insurance was for the beneficiaries, not the creditors, but there wasn't enough out of the house sale to pay the creditors, and I didn't want to go to court over it.)
Related to debt is mortgage. My mother had a reverse mortgage. While that is a subject unto itself, most people don't really know what those are or what they do. When I sold my mother's home, almost all of the purchase price went back to the reverse mortgage company because she had taken "loans" out of it over the years. Little was left, plus the house did not bring as much as it should have; I don't think that was a good period for real estate and the area was not in high demand. I do not recommend reverse mortgages based on my experience, but I suppose for some elderly they are good choices. Just be sure you know what you are getting into beforehand, whether executing the estate with one or obtaining one.
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