Stephen J. Buhler, Attorney at Law

Debts after death fall on estate and sometimes surviving spouses

People who lose spouses in Utah have significant emotions to process, but they might also have substantial financial concerns. Creditors often have a legal right to make claims upon the estate of a deceased person. The executor of an estate generally has an obligation to pay taxes, medical bills, estate administration expenses and burial costs before making distributions to heirs.

A surviving spouse is not automatically liable for these debts although they might consume an estate. A spouse would generally become directly responsible for paying debts derived from jointly held loans because the surviving person's name is on the loan documentation.

Hospitalization and hospice care prior to death could produce bills that the estate must pay. Taxes owed to federal or local governments may take priority over medical bills. The executor of an estate must file the final tax returns for the decedent and provide payment for all outstanding income or estate taxes. At times, a probate court might freeze estate assets until tax agencies have confirmed the payment of all taxes.

A person who wants to develop a financial strategy for protecting assets at the end of their life may benefit from working with an estate planning attorney. An attorney may research applicable state laws to determine how debts could be treated. A plan to pass on assets to heirs without interference from creditors might be achieved with trusts. It's possible for the development of a trust to shift some assets out of the hands of the person prior to death and enable distribution to beneficiaries later. This process may also be completed privately without review by a probate court. If the person determines that a trust is not desired, an attorney may be able to prepare a will that details the final wishes of the person and provides guidance to limit probate delays.

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