The executor doesn't keep the estate assets so why should he keep the debts?

I frequently receive questions here on my blog as well as in person about the exposure of the executor when there are debts in an estate. Something that I see often is an estate where there is no will and nobody in the family will step up to become the administrator because they are afraid of personal liability for the deceased's debts. It's time to get some better information out to people since there seems to be a general misunderstanding about what the executor or administrator is getting into.

An executor is not personally liable for the debts of the deceased or of the estate. That's a pretty hard-and-fast rule.

Recently a reader told me that the car leased by the deceased person had to be returned and this created a bad credit situation. The reader asked me whether the bad credit would now be transferred to the executor. The answer is that no, the bad credit will not affect the executor. Why would it? The lease was not in the executor's name. The payments for the lease were not coming from the executor. All the executor did was step in to return the car after the deceased passed away.

I hear similar questions where the deceased had a credit card balance. Executors and administrators fear that if they are the ones who send the death certificate to the credit card company and tell them that there isn't going to be enough money to pay them off, that the credit card folks will somehow transfer the debt to them.

It doesn't work that way. A creditor can't just decide that someone else is liable for a bill that they are simply not liable for. That includes executors.

An executor's responsibility is to use the estate assets to pay off the estate debts. Sometimes there isn't enough money to go around and the executor has to either rank the creditors in order of priority or pay them all off in part. But the executor is certainly not expected to pony up his or own money to top up someone else's debt.

Look at it this way. The executor doesn't get to keep the assets of the estate, so why should he or she have to keep the debts? The executor only has to pay the debts personally if he or she pays the estate money out to him/herself or to beneficiaries without paying debts first.