How Probate Deals With Unpaid Bills
The probate process can lead to creditors asking for any unpaid bills/debts to be paid. By going over what this means, and speaking with a lawyer, you will have a much easier time protecting your estate.
What Is Probate?
The definition of probate is as follows: a court process that allows your assets to be transferred to your beneficiaries in a manner that satisfies the laws governing the state of Florida.
Right after the probate process begins, your assets will be gathered and, then, assessed. By being gathered and assessed, the assets can then be distributed in a legally sound manner.
Outside of gathering, and assessing, your assets, probate also facilitates paying off any unpaid bills. And, if your estate has any unpaid bills or debts, then probate will, generally speaking, allow these to be taken care of.
How Does Probate Deal With Unpaid Bills?
To deal with unpaid bills, as well as any other debts, the probate process does one of three things:
- Pays off the bills/debts using funds from the estate.
- Negotiating payment plans with the people/entities that are owed money.
- Forgiving some – or, in rare cases, all – of the debt.
Just as an example, if the estate has enough money to cover the bills, then those will be paid off. On the other hand, though, if there are insufficient funds, then a payment plan may be negotiated, so that some of the debt can be paid.
If the estate doesn’t have any money, and can’t pay off the debts that it currently owes, then those can be forgiven or discharged. This is especially common if the debts are considered too “burdensome.”
Can You Avoid Dealing With Unpaid Bills?
The answer to the question outlined above is “Yes.”
Out of all the estate planning tools you can use, to avoid dealing with unpaid bills and debts that were never taken care of, one of the very best is an irrevocable living trust.
An irrevocable living trust is a trust that cannot be changed, or closed, after it has been developed. And, for this reason, among many others, the assets within the trust are protected from creditors.
Other trusts can serve a similar purpose. But, other trusts – revocable trusts, for example – do not offer the same level of protection as an irrevocable living trust, meaning that creditors may still be able to obtain assets from them.
Outside of the above, there is one other thing to note: you cannot make an irrevocable living trust for the sole purpose of defrauding creditors. This is rare, but it can happen and, as such, is something to keep in mind.
Speak With A Florida Probate Lawyer Today
If you are going through the probate process and aren’t quite sure what to do, you need to work with someone who can help you.
Speak with a Florida probate lawyer at the Millhorn Elder Law Planning Group today and we will help you navigate the probate process in a manner that leads to the best possible outcome.
Sources:
help.flcourts.gov/Other-Resources/Probate
law.cornell.edu/wex/irrevocable_trust
