Debts within a deceased person's Estate are very common, but the debts will need to be paid or handled before assets are distributed.
Only valid debts will be considered, and debtors are required to make a claim against the Estate. However, the Executor/Administrator of the Estate is obligated to notify all known debtors. Valid claims have a statute of limitation (a period during which they must be brought to the Estate) which is typically three to seven months after the Estate is opened and public notice is provided. The priority of payments in an Estate is as follows:
- Admin expenses (court fees, legal fees, management of the Estate.)
- Funeral expenses.
- Taxes (federal, state, local, income, inheritance.)