Flood Warning expires at 5:29 PM on 4/22, issued at 5:29 PM Argyle, NY | Buskirk, NY | Cambridge, NY | Clemons, NY

Paying debts and taxes

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Updated: 4/13/2007 6:35 pm
A probate action always includes a procedure for satisfying the debts and paying the taxes of a deceased person. The debt procedure usually means that a notice must be sent to all known creditors advising them to file probate actions. The creditors then generally have four months to file a claim for the amount they assert the deceased owed them, although the time period may vary among states. The executor (ig-ZEHK-you-ter) or administrator of the estate can choose to accept and pay a creditor's claim, or reject and litigate the claim. Any creditor who fails to file a claim after receiving proper notice usually loses all rights against the estate. The administrator or executor may use estate assets to pay for funeral expenses or other valid debts paid before the estate was established. All such debts and reimbursements will be reviewed, and must be approved by the court. If the court disallows any debt or reimbursement because it considers it to be improper, the administrator or executor will have to reimburse the estate personally. The tax procedure is as follows: First, an income tax return must be filed for all income received by the deceased before death. Second, an income tax return must be filed for all income received by the estate after the deceased's death. Third, a gift and estate tax return must be filed for all estates with assets greater than $675,000 (six hundred and seventy-five thousand dollars). The executor or administrator is responsible for filing both state and federal returns in a timely manner and paying all taxes due.
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