Generally, the decedent’s debts are paid from the estate. The estate consists of non-probate and probate assets. Non-probate assets are transferred directly to the named beneficiary upon the grantor’s death. Non-probate assets may include but are not limited to, benefits from life insurance policies, joint accounts, retirement plans, assets in a revocable trust and property owned jointly with rights to survivorship. Non-probate assets are subject neither to probate administration nor the debts and claims against the estate. The beneficiaries of non-probate assets have no legal obligation to pay the debts or claims against the estate.
The debts and claims of the estate are paid from the probate assets. Probate assets are transferred to the heirs through a will or in the absence of a valid will, transferred through the laws of intestacy. However, unlike non-probate assets, probate assets are subject to probate administration and debts and claims against the estate. Valid debts and timely claims are paid from the probate assets prior to the heirs receiving their inheritance. Generally, once the inheritance is received, heirs are not legally responsible for the estate’s debts. For additional information about probate and non-probate assets, visit “How Much Do You Really Know About Your Estate?”
For Maryland and the District of Columbia residents, the Reed Sherman Law Firm can create a personalized estate plan to meet your needs. For additional information visit www.ReedShermanLaw.com or click here to schedule a complimentary consultation.
