In Kentucky, the law protects you from shouldering the leftover debt of your deceased parents. If you are staring at a stack of credit card statements, understand that there is a way to settle this without risking your personal assets.
How the probate process settles debt
Upon the death of your parents, their named executor begins to administer their estate. If they happen to appoint you, part of the probate process is to settle debts using the estate’s available assets. These include the decedents’ bank accounts, real estate properties, vehicles and personal property.
Under Kentucky law, you must follow a strict order of priority for settling payments, which are:
- Costs and expenses of administration
- Funeral expenses
- Income taxes and debts with preference under federal and state laws
- All other debt claims
Following this order is critical. If you pay off a lower-tiered obligation first and then realize there is not enough money to settle the most important debt, you could be personally liable for that money.
If the estate’s assets are not enough to cover debt claims in the same category, all creditors receive a pro-rata share rather than one getting 100% and another getting nothing.
What you must not forget when settling estate debt
After you have settled payments according to their importance, you must notify known creditors directly. Generally, creditors have six months from the date of an executor’s appointment to submit their claims to the estate.
Handling estate debts with help
Navigating Kentucky’s probate laws requires precision to ensure you are not liable for improper distributions. Seeking legal advice from an experienced attorney can be a valuable resource you can use to move forward.
