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After you pass away, who pays the bills?

On Behalf of | Jul 27, 2022 | Estate Planning |

When someone passes away unexpectedly, they probably have a lot of outstanding bills. This can also be true even when the passing is expected. It’s simply very difficult to take care of everything in advance because you can’t necessarily predict exactly when this point will arrive.

For example, someone who passed away may still have to pay the property taxes and the income taxes for the year. They could also have utility payments for the previous month for things like gas or water. They may have outstanding credit card bills, a car loan, a mortgage or some other line of credit.

After you pass away, who has to handle all of these obligations?

The estate executor

Simply put, these duties are supposed to be handled by the estate executor or the estate administrator. It is their job to pay bills and taxes, along with notifying family members, notifying the government, taking an inventory of everything in the will and much more.

Before you think this would put a hardship on your estate executor, it is important to note that they don’t actually have to pay this money themselves. Instead, they take the money from your estate to pay these bills or taxes. Ideally, there’s plenty of money in the estate to cover these costs and then distribute the rest to the heirs. But in a situation where the estate does not contain enough financial assets, the executor simply pays what they can. They’re not personally responsible for anything else.

As you can see, planning in advance can make everything go much more smoothly for your family, so be sure you know what steps to take.