topic | pay estate debts, taxes, and expenses

Step 5: pay medical expenses and other debts

Medical debts often take a higher priority than other debts. Be sure that this priority aligns with applicable state laws and your own discernment. Consult an estate attorney with any questions.

Ensure all creditors have been notified of the death. If this had not been done, refer to the Topic: Gather Information and Make Notifications for information on how to proceed.

If the estate is insolvent, property may need to be sold to pay bills. Consult an estate attorney for assistance in making these decisions. State law determines who gets paid first if there is not enough money to pay debts.

Activity 1
Review Unpaid Bills

Gather the remaining bills for the estate. Accounts, Deposits Deductions, Dues Subscriptions, and Other Payments may be used as a guide to determine what bills should be paid. For each bill determine:

  • Are the charges are accurate?
  • Is the bill is for the deceased or the estate?
  • Have the goods or services have been received?

Activity 2
Record Bills that have Already Been Paid

Accounts, Deposits Deductions, Dues Subscriptions, and Other Payments may be used as a tool to record bills such as household utilities and property insurance that have already been paid.

Activity 3
Pay Final Bills

Prioritize payments. If estate funds are insufficient, state laws will dictate which bills are paid first. If estate funds are sufficient, pay overdue bills and accounts first (e.g. loans, car payments, mortgages). Make all payments through the estate checking account, and record them in the ledger of the checkbook.

Consult a Certified Public Accountant (CPA) or credit counselor with questions.

Activity 4
Update and Review Payments

Ensure that payment records are up to date. If the estate goes through formal probate, the court will require proof that all creditors have been paid.

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