Before they die, most Oklahomans who write wills or develop estate plans for the disposal of assets and property to heirs may notice that Oklahoma's probate and estate law requires consideration of any debts they might leave behind. So, assuming a testator actually dies with some debt, how is it handled?
First, Oklahoma statutes require probate courts to pay all outstanding debts left by the decedent from assets that remain in the person's estate. The process typically begins with a special administrator who gathers all of the decedent's assets and properties on behalf of the executor named in the will.
The executor then inventories all properties and assets, performs all necessary business transactions related to those properties -- for example, collecting or paying rents -- collects any outstanding debts still owed to the decedent and pays off whatever debts were owed others.
Second, in cases where decedents were owed money but the debtors cannot pay it off, executors can negotiate settlements as long as they meet the best interests of the estates.
Third, any real estate recovered from a debtor must be sold to pay off the decedent's debts. Fourth, the executor is allowed to administer any ongoing business the testator left behind as long as disposal of that business or enterprise is not required to pay off debts. This can give heirs time to figure out what they want to do with a business if they decedent left no clear instructions behind.
Because disposal of items described in a will and the terms of an estate plan can be complicated, discussing these issues with an attorney experienced in estate planning is highly recommended.
Beyond ensuring that a testator's intentions are honored, the terms of a will or estate agreement should take whatever measures are needed to leave heirs property and assets, not legal headaches.