Serving as the executor of someone’s estate is a noble gesture. Perhaps you agreed to take on that responsibility years ago when your parents updated their estate plan after retirement. Maybe you stepped up into the role because a family member died without a will and had no executor chosen to act on their behalf.
Regardless of how you assume the authority over an estate as its executor, you need to learn about the risks that come with that position. In addition to the demands on your time and the strain that your responsibilities could place on relationships with other family members, you have some personal financial liability as the executor as well.
Making the repayment of someone’s debts your top priority can help limit your liability as an executor.
Texas estates must repay all valid debts
You don’t become personally responsible for the deceased party’s debt by serving as their executor. Instead, the estate is responsible for those financial obligations. Your duty is to notify creditors about the estate proceedings and then follow Texas probate laws as you settle your family member’s financial affairs.
Your liability comes from the inappropriate distribution of estate assets. Creditors and even the Medicaid recovery program will take priority over beneficiaries and heirs. You will need to liquidate estate assets to repay every creditor who files a claim or risk being personally responsible for those deaths.
What if the estate’s resources fall short?
The good news for executors who know that a deceased individual died with more debt than property is that they aren’t responsible for the estate’s shortfall unless they cause it themselves. Once you use all of the assets in an estate to repay the debts in order of priority, you don’t have to worry about the remaining balances due.
However, if you distribute property from the estate to family members or other beneficiaries and then fail to repay creditors as a result, they could hold you personally accountable for not complying with the laws that govern probate proceedings in Texas.