How to handle the estate, as co-excutrixes.

[Bjb578cya]

Mom passed away Aug. 3rd. She had a will and I submitted it to the surrogates office of Atlantic County, NJ. My question is: How do we handle her debts? There isn't enough money in her estate to cover them. However she willed her 5 acre parcel of land to her husband of 2 yrs, my sister, and myself. She also had life insurance policies with beneficiaries. My sister and I are the excutrixes, also the only beneficiaries of her 401k. Are we suposed to use this money to pay the debts?

 

[Michael Wechsler]

Originally posted by Bjb578cya:
Mom passed away Aug. 3rd. She had a will and I submitted it to the surrogates office of Atlantic County, NJ. My question is: How do we handle her debts? There isn't enough money in her estate to cover them. However she willed her 5 acre parcel of land to her husband of 2 yrs, my sister, and myself. She also had life insurance policies with beneficiaries. My sister and I are the excutrixes, also the only beneficiaries of her 401k. Are we suposed to use this money to pay the debts?

First, the law is determined according to the state where your mother lived. My understanding is that the assets of the estate will be used to pay off the debt. After all, it wouldn't make sense if one could simply pass on the benefits of purchased property before death without having to pay debts and leave creditors hanging if they do pass away. Life insurance would likely not part be considered part of the estate that would be used to pay off creditors. From my understanding, 401k and retirement plans usually will not be used either. However, it would seem that the the land is part of the estate and might be used to pay off the estate creditors.