Page 29 - Southern Exposure - February '25

Southern Exposure, Page 29

EldEr EstAtE PlAnninG from page 28 last in line for repayment and may not receive the full they may be forced to deal with debt collectors harassing
amount they are owed. or contacting them. Worse still, there may not be any
not pay back the debt). Common examples of secured Funeral expenses also take priority over some creditor money or property left to distribute to your loved ones in
debt are mortgages (secured by the real property) and car claims. Any state and federal taxes that the decedent owes, probate court or through the trust after everything has been
loans (secured by the vehicle). Secured debts are typically as well as probate estate administration expenses incurred liquidated to pay creditors. Here are some protections that
paid off before unsecured debts when a probate estate during probate (e.g., legal and accounting fees), may also your loved ones are afforded:
is settled during the probate process. If estate assets are supersede creditors. ● State and federal law limits whom debt collectors are
insufficient to cover the secured debt, the lender can seize Knowing which debts have priority over others in authorized to contact—and how they can contact them—to
the collateral to recoup their losses. probate is the responsibility of the estate’s executor/ discuss outstanding debts. Spouses and other survivors
In rare cases and under select jurisdictions, legal personal representative. If the individual assigned this should not automatically assume that they have to pay
protections may be available for surviving spouses who role in an estate plan does not follow state probate laws, and should delay any conversation regarding payments of
wish to remain in a primary residence subject to a creditor’s they could be personally responsible for debts that should outstanding debts until they have discussed the specific
claim. These protections may delay or prevent foreclosure have been paid but were not because the executor did not circumstances with a lawyer. Collectors who go too far
if the spouse cannot pay off the mortgage in full. pay creditors in the correct order. or provide misleading information can face potential
● Unsecured debt is not backed by collateral (that is, How To Plan For Debt And Leave More Money For consequences.
there is no specific asset backing the debt). Unsecured Your Loved Ones ● When a beneficiary inherits a home, they also
debt includes credit card debt and personal loans. “You can’t take it with you” applies to what you owe take possession of the home subject to any outstanding
Unsecured creditors have lower priority than secured every bit as much as what you own. mortgage and are ultimately responsible for that debt.
creditors in probate. If the probate estate has enough funds, Your outstanding debt could create potential Anyone inheriting a home or other significant asset, such
unsecured debts are paid off before any inheritance is complications for loved ones. Your family may not as a vehicle, with an outstanding loan balance must know
distributed. However, if the estate lacks sufficient funds personally get stuck with your unpaid bills; however, their obligations to the lender. They may have to sell the
to satisfy all its debts, unsecured creditors are typically if you do not pay off your debts before you pass away, house to pay off the mortgage or apply to transfer the
mortgage to their name. In addition, individuals have the
right to refuse a gift from an estate if they do not want
RE-ELECT ELECTION DAY MARCH 11 a decedent’s heirs to assume the mortgage on a property
or cannot afford it. In some cases, federal law will allow
without triggering a due-on-sale clause, ensuring that the
||
loan remains in place after the owner’s death.
● Every state has different laws and procedures
surrounding debt repayment. Things can quickly get
complicated, so it is best to work with a local estate or
trust administration lawyer if there are any concerns about
how unresolved debts could affect the surviving family.
Estate planning is about the legacy that you leave
behind. If that legacy includes debt, an estate planning
attorney can offer advice for getting it under control
during your lifetime or help your family deal with the
consequences of your debts after death. Call us if you
need assistance planning for your debt or winding up a
loved one’s affairs.
If you have questions about your estate plan and what
documents you should have in place to plan your estate,
schedule a free consultation today by calling our office
at (561) 694-7827, Anné Desormier-Cartwright, Esq.,
Elder and Estate Planning Attorneys PA, 480 Maplewood
Drive, Suite 3, Jupiter, FL 33458.
Mom. Businesswoman. Commonsense Leader. The content of this article is general and should not be
relied upon without review of your specific circumstances
by competent legal counsel. Reliance on the information
herein is at your own risk, as it expresses no opinion by
the firm on your specific circumstances or legal needs.
An attorney client relationship is not created through the
information provided herein.
To comply with the U.S. Treasury regulations, we must
inform you that (i) any U.S. federal tax advice contained
in this newsletter was not intended or written to be used,
VOTED to lower taxes and cannot be used, by any person for the purpose of
while balancing the budget avoiding U.S. federal tax penalties that may be imposed
on such person and (ii) each taxpayer should seek advice
from their tax advisor based on the taxpayer’s particular
NEW INITIATIVES circumstances.
Myles Ma, SPFC, 46% of Americans expect to pass
1
preserving green spaces on debt to their loved ones when they die, Policygenius
(Jan. 9, 2024), https://www.policygenius.com/life-
REDUCED TRAFFIC insurance/2024-financial-planning-survey-passing-on-
debt-after-death.
improving flow and road safety 2 FiscalData, https://fiscaldata.treasury.gov/americas-
finance-guide/national-debt.
3 Chris Horymski, Experian Study: Average U.S.
Consumer Debt and Statistics, Experian (Feb. 14, 2024),
https://www.experian.com/blogs/ask-experian/research/
consumer-debt-study/#s3.
4 Id.
5 Id.
6 Bill Fay, What Happens When People Die with Debt:
Who Pays? (May 16, 2023), https://www.debt.org/family/
people-are-dying-in-debt.
7 Id.
8 FederalStudentAid, https://studentaid.gov/manage-loans/
forgiveness-cancellation/death.

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Paid by Marcie Tinsley, for Palm Beach Gardens City Council, Group 2