If someone passes away while owing others money, it’s an unfortunate circumstance of everyone involved. The people owed the money may fear that they won’t see the return of the money they loaned out.
The loved ones of the deceased will be grieving and the last thing they want to worry about is a bill. Though it’s a difficult situation, the reality is that people pass away every day while owing money to others and the law has thankfully adopted a process for dealing with such claims.
Will you ever get the money back?
Though it would be nice to give a resounding “Yes!”, the honest answer is more complicated. Though you might get every dime that you’re owed back, you might also get nothing. The reality is that it depends entirely on the financial situation of the person who passed away. If he or she owed lots of people lots of money and had little in the way of assets, it is possible you will not ever get the money you are owed back. If, on the other hand, the person owned property, like a house and cars, and had a small amount of debt, the estate of the person will likely have the necessary funds to repay the money that is owed.
Are family members responsible for a loved one’s debts?
Absolutely not. This is an important point that can cause some confusion. While you may be owed the money by the estate of the deceased, you are not owed the money by his or her relatives. Unless those relatives were signatories to the loan, they have no legal obligation to use their money to repay any debts owed by the estate of a loved one. The money is owed exclusively by the estate and if there isn’t enough money in the estate to go around, no other parties, including the executor, will be liable for paying the remainder.
Who has the responsibility of paying money owed?
Though the estate owed the money, the estate’s actions will need to be carried out by a person. So who is the person that pays the bills? Debts of an estate are managed by the person designated in the deceased’s will. This person, the executor of the estate, is often a spouse, a child or a close family friend. This person is tasked with performing an accounting of the estate, to see how much is owed and then distributing assets to pay any debts. Anything that remains, will be given to the heirs.
How much time do you have to collect money owed?
In Minnesota, the answer is not very long. Section 524.3-803 of Minnesota Statutes discusses the time allotted for creditors to file notice of their claims against an estate. The law says that in cases where proper notice to creditors is published, the creditors have no more than four months after the date of publication to bring their claims. In cases where notice was not filed, creditors have at most one year after the decedent’s death to raise their claims. The goal is to wrap the process up quickly, meaning if you are owed money you need to move fast to stake your claim.
Collecting a Debt in a Minnesota Probate
An experienced Minnesota estate-planning lawyer can help walk you through the probate process, answering questions along the way. For more information on estate planning in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.
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