How are the debts of an estate paid?

UPDATED: Sep 11, 2014

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How are the debts of an estate paid?

I have a sister-in-law who, upon marriage, signed a document stating that her husband’s house would be left to his kids from a previous marriage. She also had a property and they signed a document stating that this property was hers. Since marriage they have purchsed additional investment properties. In the event that the husband passes away and leaves large medical bills, would those bills be paid out of his asset (house) that he holds seperate or out of common assets. And if common assets, would there be a case to pull it from his asset before his estate was settled?

Asked on September 11, 2014 under Estate Planning, Missouri


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You sister needs to seek help from an estate planning attorney and discuss the matter with him or her. Debts of a decedent are paid out of the estate proceeds.  While an executor can make the decision as to which assets are sold to pay off debt, it could result in a lot of fighting.  Assets that are held jointly with rights of survivorship pass automatically at the time of death of one of the parties but that is not to say they could not be attached by creditors.  Please have her get help.  Good luck.

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