How to Handle Debts and Taxes in Probate

The probate process can vary in complexity, depending on the size and nature of a decedent’s estate. While many executors think first and foremost about the assets in a decedent’s estate, it is equally important to consider the debts and taxes that might be involved. Without addressing these crucial elements, it is impossible to have an accurate accounting of how much a person has left behind in his or her estate plan.

Part of every estate executor’s job is to thoroughly review the estate at issue. The estate could include real property, cash, bank accounts, investment accounts, retirement accounts, and tangible items that the decedent left behind. The estate could also include outstanding debts and unpaid taxes. How do you handle these debts and taxes? How do they effect the rest of the estate?

Paying Taxes

It is the responsibility of the estate executor to file the decedent’s final tax return. The executor must ensure that all of the individual’s taxes are paid, whether the taxes are federal, state, or local. The payments for these taxes come directly out of the decedent’s estate.

Paying Debts

The executor must also handle any debts on the estate. These debts could include bills, mortgages, or loan repayments, which can all add up over time and which the decedent might not necessarily have been open about during his or her lifetime. One requirement during the probate process is that the court must give debtors an opportunity to file a claim on the estate in order to notify the executor that the decedent owed them money. Only after creditors are given sufficient opportunity (and only after the debts have then been paid) can beneficiaries begin to inherit from what is left over in the estate.

If you are handling any part of a loved one’s probate process, we recommend you speak with an experienced Houston estate planning attorney to make sure you are up to date on how to proceed. Unfortunately, if you miss a step along the way, the entire process can end up costing more time and resources than you might have anticipated. In order to expedite the process as much as possible, find an attorney you know that you can trust.

Choose McCulloch & Miller for Your Estate Planning Needs

At McCulloch & Miller, we take pride in offering the highest quality legal services for our Houston community. Probate can feel daunting, especially when you have little to no experience navigating the courts. Because probate is one of our areas of expertise, we are well equipped to help you every step of the way, and we handle every client’s case with the considerable time and attention we know it deserves. To set up a consultation with a Houston estate planning attorney from our firm, call McCulloch & Miller today at 713-597-7176. You can also fill out our online form, and an attorney will reach out to talk with you about the details of your case. We provide a vast array of legal services related to estate planning, probate, trust administration, special needs planning, elder law, and more.