Parent passed away. Trust states to divide assets amongst children. There are debts.

Question

Hello, 
 
Parent left behind a trust and a will. The trust states that money owed to his estate, when it comes, is to be divided amongst the children. There are credit card debts however. Since the money was designated to go to the children, must we first satisfy the debt with this money first before making distributions to the beneficiaries? 
 
Thank you.

Nina Whitehurst · Answer

The simple answer is most likely yes. More facts would be needed to give a definitive answer. My best advice is you should schedule a consultation with an experienced trust administration attorney.

Gregory Christopher Poulos · Answer

Whether the estate is trust based or will based, the estate is responsible for payments of any debts against the estate. If creditors are known they must be paid unless there is some basis to question them. Additional notice to creditors needs to be published to notify other creditors. 
Distributions cannot take place until the estate is settled.

David Gerszewski · Answer

Generally speaking creditors and taxes (IRS) have to be paid before any distributions can be made. That is true for a Trust based plan or a will based plan in Arizona.

Q: Parent passed away. Trust states to divide assets amongst children. There are debts.