Probate requires a deceased’s personal representative to publish a notice to creditors in a county newspaper for at least three weeks, as explained on the Arizona State Legislature’s website. The representative also has the responsibility of notifying creditors by mail.
Notices must include the representative’s address and give creditors four months to file a claim against the estate. As noted by Kiplinger’s Personal Finance, unpaid creditors generally may not obtain money left in the deceased’s financial accounts that have a named beneficiary.
Types of debts that an estate’s assets may pay
Because of Arizona’s community property laws, the deceased’s spouse may become liable for paying his or her outstanding credit card debts, taxes and personal loans. Without a surviving spouse, however, a personal representative may use the estate’s assets to settle financial matters.
How a mortgage may contribute to debt repayment
A mortgage on a property left to a specified heir may require the individual to take over its monthly payments. An heir who plans to live in the house may refinance a mortgage to make the payments affordable based on his or her income. If he or she plans to sell the house, however, its proceeds may go toward paying the deceased’s unpaid debts after paying the mortgage balance.
When a representative may distribute assets to heirs
An estate may need additional funding to cover court fees and funeral costs, as noted by U.S. News and World Report. The representative also has a right to receive compensation for overseeing the probate process, which may last several months.
Probate includes gathering and valuing assets before paying the deceased’s outstanding liabilities. After settling debts, the estate’s representative may begin distributing assets to the beneficiaries listed in the will. The estate also files a final income tax return on behalf of the deceased.