When someone passes away in New York, their estate often goes through probate, the legal process of settling their financial and property matters. One key aspect of this process is determining how outstanding debts are handled before heirs or beneficiaries receive any inheritance. At Law Offices of Benjamin B. Neschis, P.C., we guide families through this process to ensure that debts are properly addressed and that the estate is distributed according to New York law.

1. Identifying the Decedent’s Debts

During probate, the executor (or administrator, if there was no will) is responsible for gathering all information about the decedent’s debts. These may include:

• Credit card balances
• Mortgages or home equity loans
• Medical bills and hospital expenses
• Personal loans or lines of credit
• Outstanding utility or tax bills

The executor must notify creditors and verify which debts are valid.

2. Priority of Debt Payments

New York law establishes a priority order for paying debts from the estate’s assets. Generally, the estate pays:

1. Funeral and administration expenses
2. Taxes owed to the government
3. Secured debts such as mortgages or car loans
4. Unsecured debts like credit cards and medical bills

If the estate does not have enough assets to pay all debts, it may be declared insolvent, and creditors are paid according to this priority.

3. Protecting Heirs and Beneficiaries

Beneficiaries only receive their inheritance after all valid debts and taxes are paid. Family members are usually not personally liable for the decedent’s debts unless they co-signed a loan or held joint accounts. By ensuring the estate follows the proper process, heirs are protected from creditor claims.

4. Legal Guidance in Probate

Navigating debt issues in probate can be overwhelming, especially when creditors are involved. A probate attorney can:

• Ensure proper notice is given to creditors
• Verify the legitimacy of debt claims
• Help manage or liquidate estate assets to pay debts
• Protect beneficiaries from unnecessary financial exposure



At Law Offices of Benjamin B. Neschis, P.C., we provide legal assistance to New York families handling probate and estate matters, ensuring debts are managed efficiently and lawfully.