As the executor of a will, it goes without saying that you will want to make all the right decisions in a timely manner. Unfortunately, this can lead to a situation in which you get ahead of yourself.
It’s a common mistake to pay bills too quickly. While you don’t want to let unpaid bills linger, it’s also important that you never get ahead of yourself.
Here’s what you need to remember: The bills that arrive after a person passes on do not have to be paid immediately. These should be further down the list, as there are other debts that should first be paid.
If you pay bills as they arrive, as opposed to prioritizing payments, it’s possible that there could be a breach of fiduciary duty.
An example of this would be an executor who is aware of a large federal income-tax liability. In this case, the executor may have the personal liability to pay the tax bill before all others.
There is no denying the fact that it can be a challenge to organize a person’s finances after he or she passes, especially as it relates to debt. Even so, it’s imperative to be patient when doing so. This helps avoid a mistake when the wrong bills are paid too quickly.
The probate process can be complex, especially if there is a lot of debt to deal with. Paying bills quickly may sound like the right idea, but it’s important to take a step back as to understand what is due and how to best deal with each type of debt.
Source: The Wall Street Journal, “The Biggest Mistakes Executors Make,” accessed Sep. 18, 2017