The process of leaving assets and funds to loved ones may get more complicated than families expect. Even if Nevada families go through the proper processes and ensure that everything is handled when it comes to estate planning, the estate administration process can be bumpy due to debt. Any families concerned about debt may want to investigate what role debt may play in the estate-planning process.
When a person designates an estate administrator and decides what kind of funds to leave to whom, that amount can be greatly diminished if there are certain kinds of debt with which to be dealt. If the person did not pay his or her taxes on time or at all for a number of years, the IRS may take the back tax amount from the estate before any funds are administered to heirs. This can add up to a lot if debts were ignored for some time.
There are other kinds of debt that could impact the amount of an inheritance left behind. If someone has medical bills or credit card debt, what is owed may be taken from the estate. Also, having mortgage debt can impact the amount of money someone may inherit from an estate.
Fees, penalties and back-due monetary obligations may make it complicated for someone to handle the estate administration duties someone agreed to undertake. Knowing what to expect before an estate needs to be settled can help all parties feel better prepared. Any Nevada families going through the estate-planning process may benefit from full disclosure of debts or having a clear idea of what the estate may contain after debts are settled.
Source: forbes.com, “Heirs Left With Unpaid Bills May Inherit More Grief Than Gold“, Deborah L. Jacobs, June 18, 2014