If you are looking to create or perhaps update your estate plan in Florida, you should take note of your current debt load as well as assets. Similarly, if someone has asked you to be the executor of a will, you’ll want to take a close look at the person’s financial situation. Having a solid understanding of the liabilities that the person holds is important down the road.
After you die, your creditors can have the right to be paid before money is distributed to your heirs or other beneficiaries in many cases. This is because, as Forbes points out, you can die but your debts cannot. Every single type of debt that you may incur can creep up and be something that your surviving loved ones or will executor must deal with. This includes credit card debt, medical bills, debts related to a business, mortgages, other loans and taxes. Even debts that you racked up illegally could become payable upon your death.
Taxes can be especially worrisome to your heirs. There have been extreme cases in which the adult children of deceased people have had to pay their parents’ tax bills. Your executor could also be liable for some debts if they fail to follow proper processes and pay your heirs before paying your creditors. With all of these potential challenges, the thought of reviewing your estate plan with your advisors or heirs makes a lot of sense.
To learn more about how debts are handled after death, you can visit our Florida Estate Planning website.