Why is the mortgage not a debt that the estate must pay like it has to pay off creditor claims? The answer is that under Florida law, a mortgage on real property is the exception to the general rule that the estate must pay the debts of the decedent.
Is debt part of an estate?
As a rule, a person’s debts do not go away when they die. Those debts are owed by and paid from the deceased person’s estate. By law, family members do not usually have to pay the debts of a deceased relative from their own money.
What happens to mortgage debt when you die?
Typically, debt is recouped from your estate when you die. This means that before any assets can be passed onto heirs, the executor of your estate will first use those assets to pay off your creditors. With mortgage debt, however, the process is different.
How are debts and mortgages dealt with in probate?
Dealing With Debts and Mortgages in Probate. When a loved one dies leaving property, debts, and a mortgage, and if he did not have a living trust, probate is required to sort everything out. Probate is the process of paying off the deceased person’s final bills and expenses and transferring his property into the names of living beneficiaries.
Who is responsible for paying off debts of an estate?
One of the executor’s most important jobs is to pay the legitimate debts of the deceased person and the estate, using estate assets. Who pays the bills before the court has officially appointed an executor, or if there won’t be a formal probate proceeding?
What happens if there are more debts than assets in an estate?
You’ll need to work out a system, perhaps with advice from a lawyer, to protect everyone’s interests as best you can. If it appears that there are more debts than assets, you are dealing with what’s called an insolvent estate. Don’t pay any debts you don’t have to—state law will set out a priority list for you to follow.
