When you are made the personal representative of someone’s estate, one of your jobs will be to settle any debts. You need to take care about how you do this. Do not be tempted to prioritize those who shout the loudest. Under Colorado law, there is a specific set of guidelines you must follow when executing an estate.
You might not need to pay all debts
Some debts die with the person; others outlive them. It is essential to find out which debts are still valid. Debts cosigned with someone else usually become the cosigner’s responsibility.
How do I find out what debts the deceased had?
When the court appoints you as the personal representative, you have 30 days to send out a Notification of Appointment. You should send this to the relevant creditors and financial institutions you find when investigating the deceased’s estate.
Anyone who believes the estate owes them money has four months to file a claim. As you might not discover all the people or organizations the deceased owed money to, you must also publish a notice in the local paper. It gives anyone who you did not contact directly a chance to claim. You might want legal help if you are unsure whether a claim is valid. You can contest it within 60 days of receiving it.
At the end of the fourth month, list all the creditors and the amounts owed. Compare this with the estate’s assets to see if the estate has sufficient funds to pay all of the debts. Again you may need help to determine in which order to pay creditors. Only once all the debts are paid off can you proceed with the more enjoyable part of administering an estate and pass the remaining assets to beneficiaries.