7 Things Every Executor Should Know About Estate Debt

Being named the executor of someone’s estate is an honor, but it is also a job. One of the more complicated parts of the role involves handling debt. You are not just distributing assets. You are also responsible for making sure any outstanding debts are addressed appropriately.

Many people are surprised to learn that debt does not simply disappear when someone dies. But the rules around who pays, what gets paid, and how quickly it needs to happen are not always intuitive. If you are serving as an executor, here are seven key things you should know about estate debt.

1. You are not personally on the hook for the deceased person’s debts

First and foremost, this is important to get clear. As executor, you are responsible for paying the deceased person’s debts from the estate’s assets, not your own money. Creditors cannot come after you personally unless you mishandle the estate or mix up funds.

So if the estate has $50,000 in assets and $100,000 in debt, the estate is considered insolvent. You may need to sell off assets to pay debts, but once the estate runs out of money, the debt stops there. It does not transfer to family members unless they were joint account holders or co-signers.

2. Not all assets are subject to estate debt

Some assets are considered “non-probate,” which means they pass directly to a beneficiary and are not available to pay off estate debts. These might include life insurance policies with a named beneficiary, retirement accounts like IRAs or 401(k)s, jointly owned real estate with rights of survivorship, or assets held in trust.

You do not have to touch these non-probate assets to satisfy creditors. However, it is important to know which assets fall into this category and which do not, because some people mistakenly think everything automatically goes to the family. That is not always the case.

3. You must notify creditors and give them a chance to make a claim

One of your early duties as executor is to notify known creditors and post a public notice, typically in a local newspaper or court system. This starts the clock. Creditors then have a limited amount of time to file claims, often between three to six months, depending on state law.

If a creditor does not respond in time, the debt may not need to be paid at all. But if you skip this step or fail to follow the right process, you might accidentally open yourself up to liability.

4. You may need to sell property to pay off debts

If the estate does not have enough cash to cover outstanding bills, you may be required to sell items like vehicles, collectibles, or even real estate. This can be difficult when family members are emotionally attached to those assets, but it is part of the job.

Executors must prioritize debts based on legal guidelines, and sometimes that means liquidating items that the family would have liked to keep. You are not making these choices arbitrarily. You are following the law and doing what is required to settle the estate properly.

5. Some debts are forgiven when someone dies

Not all debts follow someone beyond the grave. For example, federal student loans are usually discharged when the borrower dies. In some cases, private student loans are as well, although it depends on the lender and the terms.

Credit card debt, on the other hand, is more complicated. If the card was solely in the deceased person’s name and there is no money left in the estate, the debt typically goes unpaid. However, if there was a joint account holder, that person may still be responsible. An authorized user is not the same as a joint account holder and usually has no legal obligation to pay.

6. You must follow a legal order of priority when paying debts

You cannot just pay off debts in the order they show up. Most states have a priority list. In general, administrative costs like court fees and executor compensation are paid first. Next comes funeral expenses, followed by taxes, secured debts like mortgages, and finally unsecured debts like credit cards or personal loans.

If the estate is insolvent, you may not be able to pay everything, and that is okay. But you must follow the proper order or risk having creditors or heirs challenge your decisions.

7. It is okay to ask for help

Executors are not expected to be experts in estate law or finance. You are allowed to hire professionals, and in many cases, the estate can cover the cost. That includes probate attorneys, accountants, real estate agents, and others who can help you stay compliant and reduce stress.

Trying to figure everything out alone can lead to costly mistakes. A good advisor can help you identify which debts are valid, how to handle creditor claims, and how to make sure you are protecting yourself along the way.

Final thoughts

Handling debt as an executor can be overwhelming, especially when you are also grieving someone you cared about. But with the right information and support, you can do it well. Focus on following the process, keeping clear records, and making decisions based on law rather than emotion.

If you are unsure where to start, consider using a checklist or organizational tool designed for executors. It can help you track debts, identify assets, communicate with creditors, and avoid missing important deadlines. You do not have to go it alone.