HNWElder Law, Estate Administration and Probate

By Fredrick P. Niemann, Esq. an Estate Administration and Probate Lawyer

Under New Jersey Law, upon death, a person’s estate property is first used to pay priority claims for probate, funeral expenses and then to pay debts.  Generally, all debts must first be paid before remaining assets are distributed to beneficiaries.  For instance, outstanding credit card balances will be paid before gifts are distributed to a person’s heirs.

A major exception to this general rule is for “secured debts”, such as home loans or auto loans.  In the case of secured debts, property can be distributed subjected to this debt.  In other words, let’s say you have a boat with a value of $10,000 and have a loan on the boat of $5,000.  You can leave the boat to someone, but it will be that person’s obligation to pay off the boat loan.

What happens if you owe more than you own?  In general, people cannot inherit another person’s debts.  If there is not enough cash to pay your debts, then all property will be sold to pay the debts, and no one will inherit anything.  For example, say that you owe $12,000 in credit card debt but only the estate you leave has cash and property worth $10,000.  In that case, the property will be sold by the court, and only $10,000 will be paid to the credit card issuer.

Imagine a situation in which some estate property has to be sold to pay off debt but there are still assets left to distribute.  This example can lead to some difficult decisions that have to be made.  The executor named in the Will is responsible for making these decisions as to which pieces of property are sold. 

What is someone owes you money?  This money can be collected by your executor and added to your overall Estate.  However, you can always choose to forgive debts in a Will.  This would be similar to making a direct gift, but instead of leaving something to someone, you state you are forgiving a specific debt.

Contact me personally today to discuss your probate and administration matter.  I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns.  You can reach me toll free at (855) 376-5291 or e-mail me at

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