When a loved one passes away, managing their estate can be an emotional and complex process—especially when debts are involved. In Tucson, probate is the legal process used to settle a decedent’s estate, and handling outstanding debts is a major part of it. Whether you’re the personal representative or a family member trying to understand your responsibilities, here’s what you need to know about dealing with debts during probate in Tucson, Arizona.
1. Understand What Probate Does
Probate is a court-supervised process that validates a will (if there is one), appoints a personal representative (executor), and ensures the orderly distribution of assets. Before beneficiaries receive anything, debts and taxes must be paid from the estate.
2. Take Inventory of the Estate
The first step in handling debts is knowing exactly what the estate owns. This includes:
- Bank accounts
- Real estate
- Vehicles
- Personal belongings
- Investments
Knowing the full value of the estate helps determine what’s available to cover debts.
3. Notify Creditors
In Arizona, the personal representative must notify known creditors and publish a notice to unknown creditors. Creditors generally have four months from the date of publication to file a claim against the estate. If they don’t, their claim may be barred.
4. Classify the Debts
Not all debts are created equal. Arizona law sets priority levels for how debts should be paid. Typically, the order is:
- Costs of administering the estate (attorney fees, court costs)
- Funeral and burial expenses
- Taxes and federal debts
- Secured debts (like mortgages)
- Unsecured debts (like credit cards, medical bills)
Understanding this order is key to ensuring debts are paid legally and fairly.
5. Use Estate Funds, Not Personal Funds
Personal representatives are not responsible for paying debts out-of-pocket unless they’ve co-signed a loan or otherwise accepted liability. Debts are paid from the estate’s assets.
If the estate doesn’t have enough to pay all debts, it’s considered insolvent. In this case, debts must be paid according to Arizona’s priority list until the funds run out.
6. Avoid Premature Distributions
No assets should be distributed to heirs until all valid debts and expenses are paid. Distributing too early can lead to legal and financial issues, especially if a creditor later files a claim.
7. Work with Local Professionals
Probate can get complicated—especially if the estate involves real estate, disputed claims, or is insolvent. It’s wise to work with a probate attorney, accountant, and a knowledgeable Tucson-based Realtor to navigate the process efficiently.
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If the estate includes a home or other real property, you’ll want a professional who understands the probate process and the Tucson market.
Ryan Comstock, U.S. Air Force Veteran and one of Tucson’s top real estate agents, is here to help you every step of the way—from valuation and marketing to closing the sale during probate.
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Let Ryan guide you through one of life’s toughest transitions with professionalism, care, and experience.