When a relative dies, they can leave numerous bills unpaid. These bills have to be addressed before the government will consider their estate settled. Usually the job of paying a relative's bills falls to the executor of the estate, a person who usually is named in the relative's will. It is important to pay the bills properly because, even though all creditors may try to make a claim against an estate, state laws require you to pay a relative's bills in a specific order.
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Go through your relative's personal documents and records to locate his will. The documents may be in some sort of filing cabinet in their house or in a safety deposit box, but if the deceased wasn't so orderly, you'll need to pay attention to pretty much any envelope that isn't filed.
File the will with your local probate court clerk. Fill out a petition to put the will through the probate system when you do this.
Put a public notice in your newspaper announcing that you've filed the will of your relative with the probate court. The public notice lets creditors and service providers know that they can come forward to make a claim against the deceased's estate if they desire.
Collect all the outstanding bills you can find in your relative's belongings. Make a list of the bills, the person or company owed and the amount still outstanding. Write to each creditor and service provider to be sure that they are aware your relative has passed away and that they may make a claim.
Check with the probate court to find out the order of precedence for the bills you have in your region (state). Normally, funeral and burial costs get paid first, followed by costs for any final illnesses, probate and death taxes/fees. Secured debts are handled next, according to the Power to Change website. These are debts that are attached to assets like a car your relative might have had--the assets stand as collateral for the debt. Any unsecured debts are paid next, according to the MyStateWill website. Unsecured debts are debts that don't require collateral--credit card debt is an example.
Make a list of every creditor and service provider that comes forward to make a claim. Bring that list to the probate office and authorise the estate to pay those claims.
Tips and warnings
- Keep in mind that creditors generally cannot force you to pay your relative's debts, except if you have been connected legally to a debt (e.g., you had joint ownership of a car with a loan attached). It is the creditor's problem, not yours, if the estate is insolvent (doesn't have enough to cover all debts). People sometimes assume they have to cover what the estate doesn't cover and pay money they are not obligated to give.
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