When managing an estate, it is important to understand the various types of bills that may arise.
Estates, by their nature, incur numerous financial obligations that an executor must address diligently.
1. Funeral expenses
One of the primary obligations an estate faces is the payment of funeral and burial costs. These expenses encompass everything from the casket and funeral service to burial plots and headstones. In 2021, the median cost of a funeral was $7,848.
2. Outstanding debts
An estate may have outstanding debts to settle. These debts can include credit card balances, mortgages, car loans and personal loans. Contact creditors promptly to inform them of the individual’s passing and work out repayment arrangements.
3. Medical bills
Unpaid medical bills can be a significant financial burden for an estate. These bills may encompass hospital stays, doctor visits, medications and other medical treatments. Address all medical expenses to avoid legal complications.
4. Property taxes
Property taxes are a recurring expense that an estate must handle. Failing to pay property taxes can lead to legal consequences, so make these payments in a timely manner.
5. Income taxes
The IRS still expects a final filing from the deceased and payment for any taxes owed. Additionally, the estate may be subject to estate or inheritance taxes, depending on the jurisdiction and the value of the estate.
6. Insurance premiums
If the deceased had insurance policies, such as life insurance or homeowners insurance, the premiums need to continue. This is particularly important for safeguarding assets and ensuring beneficiaries receive the intended benefits.
Managing the financial obligations of an estate involves addressing a range of bills. Executors and administrators must navigate these financial responsibilities diligently and in accordance with applicable laws and regulations to ensure the orderly distribution of the estate’s assets to beneficiaries.