During the process of handling and distributing the estate of an individual, some expenses are bound to be incurred. These expenses must be paid in a timely manner, and they are usually taken out of the assets of the estate. It is up to the executor or administrator of the estate to handle the expenses.
Administrator or Executor
When an individual passes away, his estate must be distributed to beneficiaries and his debts must be paid. If the individual created a will or a trust, he would have chosen an executor to oversee this process. If an executor was not appointed or if the individual do not have a will or trust set up, the probate court will name an administrator to oversee this process. The executor or administrator will then be in charge of paying the estate expenses.
When an executor or administrator is appointed to handle this process, she will have to find and assemble all of the assets that were owned by the deceased. For this process, the individual should consider opening a separate checking account in the name of the estate. This way, she can transfer money from all of the deceased person's accounts into the new account. Any expenses for the estate can then be paid out of this account.
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Throughout the process of handling an estate, various expenses are bound to come up. For example, if a lawyer is involved, his legal fees will have to be paid. As the executor or administrator, you will also have to be paid a reasonable amount of money for your service. You may also have to pay income taxes for the estate if it is still earning money. Any other miscellaneous expenses associated with distributing the assets should also be paid from this account.
The executor or administrator of the estate will also have to handle the debts associated with the deceased person's estate. Once the individual passes away, the executor will publish a notice of death in the newspaper for creditors. At that point, many creditors could file claims to be paid. The executor will then have to pay out the claims in the order set forth by state laws. The debts with the highest priority will be paid first until the funds are depleted or all creditors are paid.