• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • WHO WE ARE
    • About Our Firm
    • Attorney and Staff Profiles
    • News and Events
  • Areas We Serve
    • Essex County, MA
      • Andover
      • North Andover
    • Hillsborough County, NH
      • Manchester
      • Nashua
    • Middlesex County, MA
      • Concord
      • Lexington
      • Wakefield
      • Winchester
      • Woburn
    • Rockingham County, NH
      • Exeter
      • Londonderry
      • Salem
  • Services
    • Asset & Business Planning
    • Elder Law & Medicaid Services
    • Estate And Gift Tax Figures
    • Family-Owned Businesses & Farms
    • Legacy Planning Services
    • LGBTQ Estate Planning
    • Loss Of A Loved One
    • Pet Planning
    • Power Of Attorney
    • Probate and Trust Administration
    • SECURE Act
    • Special Needs Planning
    • Young Families
  • Elder Law
    • Coping with Alzheimer’s
    • Hospice Care
    • Medicaid Planning
    • Nursing Home Planning
  • Resources
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder law reports
      • Elder Law Resources
        • Elder Law Resources – Londonderry, New Hampshire
        • Elder Law Resources North Andover, Massachusetts
        • Nashua, New Hampshire Elder Law Resources
        • Woburn, MA Elder Law Resources
    • Estate Planning
      • Estate Planning Articles
      • Estate and Gift Tax Figures
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Free Seminars
    • Frequently Asked Questions
      • Asset Protection Planning
      • Business Planning
      • Charitable Gifting
      • Estate Planning
      • Elder Law
      • Frequently Asked Questions for Families Without an Estate Plan
      • Incapacity Planning
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Trust Administration & Probate
      • Wills and Trusts
    • Newsletters
    • Pre Consultation Form
    • Presentations
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss Of A Loved One
      • Probate Resources
        • Nashua, New Hampshire Probate Resources
        • Probate Resources – Londonderry, New Hampshire
        • Probate Resources – North Andover, MA
        • Probate Resources – Wakefield, Massachusetts
        • Woburn, MA Probate Resources
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
    • Published Books
  • Live Seminars
    • Online Seminars
    • In-Person Seminars
  • Videos
  • Contact Us
  • Blog
  • Reviews
    • Our Reviews
    • Review Us

DeBruyckere Law Offices, PC

Serving Southern New Hampshire & Essex Country, Massachussetts

Call us today(603) 894-4141

(978) 969-0331

Online Seminars
Attend Free Seminar
Home » Estate Planning » What Happens If an Estate Lacks Sufficient Cash to Pay Claims?

What Happens If an Estate Lacks Sufficient Cash to Pay Claims?

March 28, 2019Estate Planning

Londonderry estate planning attorneys

Creating a successful estate plan requires you to consider much more than just how you want your estate assets distributed after you are gone. You must also protect those assets both during your lifetime and at the time of your death. Failing to consider claims that are likely to be filed against your estate during probate, for example, can be a costly mistake. To illustrate that point, the Londonderry estate planning attorneys at DeBruyckere Law Offices explain what happens if an estate lacks sufficient cash to pay claims.

The Probate Process

When you die you will leave behind assets owned by you at the time of your death. Those assets make up your estate. The legal process that oversees the eventual transfer of those estate assets to your beneficiaries and/or heirs of the estate is referred to as “probate.” In addition to ensuring that your assets are distributed according to your wishes or according to the state intestate succession laws, probate also serves other functions, including:

  • Authenticating the decedent’s Last Will and Testament if one was left behind
  • Identifying, locating, securing, and valuing estate assets
  • Locating legal heirs of the estate if the decedent died intestate, or without a valid Will
  • Allowing creditors the opportunity to file claims against the estate
  • Litigating any challenges to the Will or estate
  • Ensuring the taxes owed by the estate are paid

Understanding Estate Liquidity

You have probably heard the term “liquid assets” before in everyday conversation. “Liquidity” is a term used when referring to the value of an asset. A liquid asset is one that can easily be converted into cash. Obviously, cash held in a checking or savings account qualifies as a liquid asset. Other assets have varying degrees of liquidity, based on how easily and/or quickly they can be turned into cash. Your home, for example, is not a liquid asset because it may take months to turn the home’s value into cash. Gold, on the other hand, has a high liquidity value because it can easily be turned into cash. The value of your estate’s liquid assets is often very important when it comes time to probate your estate because it is always better to pay claims with cash.

Paying Estate Debts

Before assets can be distributed to the intended beneficiaries and/or heirs of your estate, creditors of the estate must be allowed the opportunity to file claims against the estate. In addition, any taxes due from the estate must be calculated and paid. Creditor claims submitted to the court are reviewed by the Executor of your estate and approved or denied. Approved claims must then be paid out of the available estate assets. Likewise, any federal (and/or state) gift and estate taxes due must be paid out of the estate assets. If the estate has sufficient cash, either from a financial account or another source, paying those claims is a fairly simple process; however, if the estate lacks sufficient liquid assets to cover all the approved claims and taxes due, the Executor’s job becomes considerably more difficult.

If your estate lacks enough cash to cover all approved debts and tax obligations, your Executor must convert non-liquid assets into liquid assets to pay the taxes and debts. That usually means selling estate assets to raise the necessary funds. Inevitably, the need to sell estate assets creates controversy because it means selling tangible assets that were promised to loved ones and/or that may have sentimental meaning to those loved ones. Your children, for instance may not be happy about the need to sell the family home. Those same children may be upset that an art collection promised to them must be sold to raise the funds needed to pay debts. Furthermore, your Executor may have a very tough time deciding which assets to sell unless you left guidance in your Will or in another estate planning document that specifies which assets to sell first.

The best way to avoid leaving your loved ones and your Executor in such a difficult position is to ensure that your estate has sufficient liquid assets available at the time of your death.

Contact Londonderry Estate Planning Attorneys

For more information, please join us for one of our upcoming FREE seminars. If you have additional questions about creating an estate plan with sufficient liquidity, contact the Londonderry estate planning attorneys at DeBruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.

  • Author
  • Recent Posts
Daniel DeBruyckere
Daniel DeBruyckere
Attorney Daniel A. DeBruyckere has been practicing law in New Hampshire and Massachusetts since 1998, and has helped hundreds of clients with their estate planning and elder care issues. He is very well respected in the area of estate planning, probate, trust administration, elder law issues, and business planning.
Daniel DeBruyckere
Latest posts by Daniel DeBruyckere (see all)
  • Concerned about Leaving a Large Inheritance? A Trust May Be the Solution - January 19, 2021
  • If You Are a Parent Estate Planning Is Essential - January 14, 2021
  • Is It Too Late for Medicaid Planning to Help Me? - January 12, 2021

Other Articles You May Find Useful

What Is an Incentive Trust?
Providing for Your Spouse If He/She Is Not a Citizen
DeBruyckere Law Offices, PC | Estate Planning & Medicaid Attorneys
Estate Planning — 3 Mistakes to Avoid
What the 2020 Election Could Mean for Your Estate Plan
A Time for Thanks and Community
Fair Isn’t Always Equal and Vice Versa

DeBruyckere Law Offices, PC

Download our free Estate Planning Worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.
  • This field is for validation purposes and should be left unchanged.

Subscribe to Our Newsletter

Please fill out the form below:
  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

Blog Subscribe

  • This field is for validation purposes and should be left unchanged.

Testimonials

I felt complete trust and confidence in Dan DeBruyckere and his staff. They have a caring, low-key approach and there is no pressure to add products to the estate plan; rather he makes me aware of changes in the law, etc. I always learn something new to assist me in our planning!

LN

Your seminar was the only seminar we attended without financial advisors wanting to invest our money instead of protecting it! The information this firm provided was easy to understand even though it is a difficult topic. Thank you for all of your help!

HR

We both felt so comfortable in they way our Estate Planning was handled. We felt like someone was watching out for our best interest. Everyone we worked with at the firm was thorough, and explained everything in a way where we could walk away feeling like everything was complete.

RS

A truly great experience all the way through. Felt like we were a part of the family! Thank you.

LW

We could not have picked a more qualified law firm. Everyone that we came in contact with made us feel at ease.

Happy Client

We were very impressed with the statements put forth by Dan at the Seminar. We were impressed even more by their down to earth approach and the efficiency they accomplished it all.

Charles

Londonderry Office

Londonderry Office
One Verani Way
Londonderry, NH 03053
Phone: (603) 894-4141

See Larger Map Get Directions

Nashua Office

Nashua Office
76 Northeastern Boulevard, Unit 31B
Nashua, NH 03062
Phone: (603) 894-4141

See Larger Map Get Directions

North Andover Office

North Andover Office
231 Sutton St, Suite 1B
North Andover, MA 01845
Phone: (978) 686-4645

See Larger Map Get Directions

Woburn Office

Woburn Office
444 Washington Street, Suite 503
Woburn, MA 01801
Phone: (978) 969-0331

See Larger Map Get Directions

By Appointment Only

BEVERLY OFFICE

Beverly Office
900 Cummings Center Suite 204-U
Beverly, MA 01915
Phone: (978) 969-0331

See Larger Map Get Directions

Office Hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 5:00 PM

Map

dadlawoffices_sidbr_map
  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
footer-logo

© 2021 DeBruyckere Law Offices
All Right Reseved.

Attorney Advertisement

© 2021 American Academy of Estate Planning Attorneys, Inc.