For many Texas residents, understanding the ins and outs of finance is not their forte. As a result, they may find themselves facing many situations in which they wonder how to take the right steps for handling their money. When a parent dies and that person’s remaining financial affairs fall into the laps of their surviving adult children, those children may feel at a loss as to what to do. However, many financial aspects must be addressed during probate.
In particular, surviving children may wonder what will happen to their parent’s outstanding debts. While the priority debts will likely need to be paid during the probate process, the children do not have to use their personal funds for those payments. In fact, the executor of the estate — which could be one of the children or someone else — will handle those payments. Even then, the executor will use estate funds and not pay out of pocket.
There may also be some question as to what counts as estate funds. For instance, when it comes to a life insurance payout, the money may or may not count as estate funds. If the insurance policy has a direct beneficiary, it does not fall under estate funds because the payout passes directly to that beneficiary. However, if the policy does not have a beneficiary designated, the payout would go to the estate and become estate funds usable for outstanding debts.
Paying off debts and handling other financial matters during probate can seem intimidating. The process can be a difficult one and any mistake could cause major issues. Fortunately, individuals closing Texas estates can obtain help throughout the process from knowledgeable attorneys who can explain each aspect that needs to be handled and when to handle it.