If you’re making an estate plan, it is wise to address debt. For instance, maybe you want to set up a trust fund in advance that can be used to cover some of these costs. There are also ways to pay down debt if you believe you are approaching the end of your life and you want to eliminate it before your passing.
But this doesn’t mean you can address everything. This is especially true if it is an unexpected passing. You may still owe income taxes for the money that you earned that year, or you may owe property taxes even if your house itself is paid off. So who covers these debts for your estate?
Choosing an estate administrator
What you need to do is choose an estate administrator or an estate executor. If you pass away, this person is in charge of ensuring that your estate plan is actually followed. They will gather your assets, take an inventory, distribute the copies of the will to your beneficiaries and work with them to distribute the assets that you have left behind.
One job that the estate administrator does is to inventory the debts that remain. Some of these debts may need to be paid by the estate before the assets can be given to the beneficiaries. The estate administrator is the one who has the legal ability to access your funds or accounts and use them to pay down your debts on your behalf.
Creating an estate plan can solve many of these potential issues in advance for your family members. Be sure you know exactly what steps to take and what options you have.