• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Law Offices of Kobrick and Moccia

Long Island Estate Planning Attorneys

ESTATE, TRUST PLANNING &
ELDER LAW INFORMATION CENTER

Call Now: (800) 295.1917

  • Attend Our Free Webinars
  • Home
  • Our Firm
    • About Our Firm
    • Client Testimonials
    • Meet Our Team
  • Services
    • Blended Family Planning
    • Elder Law
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning
    • Trust Administration
  • Elder Law
    • Coping With Alzheimer’s
    • Guardianship
    • Medicaid Planning
    • Nursing Home Planning
  • Resources
    • Articles
    • Elder Law Resources
      • Commack Elder Law
      • Elder Law Reports
      • Harrison Elder Law
      • Hauppauge Elder Law
      • Rockville Centre Elder Law
      • White Plains Elder Law
    • Estate Planning Definitions
    • FREE Estate Planning Worksheet
    • FREE Seminars
    • Frequently Asked Questions
      • Elder Law
      • Estate Planning
      • Families Without an Estate Plan
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid
      • Probate
      • Trust Administration
      • Trust Administration & Probate
      • Wills and Trusts
    • Is My Estate Plan Outdated?
    • Legacy Wealth Planning Consultation Form
    • Medicaid Resources
    • Probate Resources
      • Harrison Probate
      • Hauppauge Probate
      • Long Island Probate
    • Probate Checklist
    • Special Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Estate Planning for Niches
      • Trust Administration
    • Top Estate Planning Techniques
  • Communities We Serve
    • Nassau County
      • Garden City
      • Lynbrook
      • Malverne
      • Rockville Centre
    • Suffolk County
      • Commack
      • Dix Hills
      • Hauppauge
      • Nesconset
      • Smithtown
    • Westchester County
      • Harrison
      • Mamaroneck
      • Rye Brook
      • White Plains
  • Webinars
  • BLOG
  • Reviews
    • Our Reviews
    • Review Us
  • Contact Us
Home » estate liquidity » What Happens If There Is Not Enough Cash in Your Estate to Pay Creditors?

What Happens If There Is Not Enough Cash in Your Estate to Pay Creditors?

January 13, 2016 by Anthony Moccia Leave a Comment

Pay CreditorsWhen most people think about estate planning goals they focus on things such as the divisions of their estate assets upon death and ensuring that loved ones are provided for in their absence. What people often tend to overlook is the fact that creditors of an estate are also entitled to file claims against the estate during the probate process. What happens though, if there is not enough cash in your estate to pay creditors? Because this is something that occurs frequently, it is in your best interest to know the answer to that question. Even better, you should know how to make sure your estate doesn’t lack liquidity.

After your death, your estate must go through the legal process known as probate. During probate, your estate assets are identified, valued, and inventoried. In addition, notice must be given to known, and potential, creditors of the estate that the probate process is underway. Creditors then have a limited period of time within which they must file a claim against the estate. The Executor of your estate is charged with reviewing claims filed against the estate and approving or denying each claim. Claims that are approved are then paid out of estate assets, using liquid assets when possible. “Liquid” assets are assets that have an immediate cash value, such as cash, investment accounts, and proceeds from a life insurance policy. Because they are liquid assets, they can readily and easily be used to pay approved creditor claims.

When there are insufficient liquid assets, however, your Executor must turn to other assets in order to pay approved claims. This is what you do not want to happen because it means selling assets that you did not intend to part with from your estate. It could even mean selling sentimental and/or one-of-a-kind assets. By way of illustration, let’s assume you have $150,000 in liquid assets in your estate; however, approved creditor claims total $200,000. Along with your liquid assets you also have a home worth $200,000, a stamp collection valued at $75,000, and family heirloom furniture valued at about $40,000. Your Executor will likely be forced to sell one (or more) of those assets in order to make up the $50,000 deficiency in liquid assets needed to pay your creditors. The problem is, however, that you promised the stamp collection to your best friend who shares your love of collecting. You had also hoped to be able to pass down the family heirlooms to your children along with your house. Unfortunately, that may not happen. Moreover, your Executor will be in the unenviable position of having to decide which assets to sell.

The best way to avoid ending up with an estate that lacks sufficient liquid assets is to work with an experienced New York estate planning attorney. It is equally important to review your estate plan on a regular basis to ensure that your liquid assets are keeping up with your debts. Contact the experienced New York estate planning attorneys at The Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.

 

  • Author
  • Recent Posts
Anthony Moccia
Anthony Moccia
Anthony Moccia is an attorney and partner at The Law Offices of Kobrick & Moccia.His practice focuses on estate planning and elder law.He is a member of the New York State and Nassau County Bar Associations.He frequently presents free seminars on wills & living trusts to area residents and his seminars are said to be “informative, entertaining & easy to understand.”
Anthony Moccia
Latest posts by Anthony Moccia (see all)
  • “Last Will and Testament” Origin - April 1, 2021
  • Do I Need a “Durable” Power of Attorney? - April 2, 2020
  • Joint Tenancy Pros and Cons - March 31, 2020

Filed Under: estate liquidity

Other Articles You May Find Useful

probate attorneys
Probate Attorneys Discuss Estate Liquidity
Law Offices of Kobrick and Moccia
Do I Have Enough Estate Liquidity?
Free Report: New York Estate Planning Considerations
Law Offices of Kobrick and Moccia
Estate Liquidity: What You Need to Know

Reader Interactions

Leave a Reply Cancel reply

You must be logged in to post a comment.

Primary Sidebar

Law Offices of Kobrick and Moccia

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.

Follow Us

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Blog Subscription

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

GARDEN CITY

1305 Franklin Avenue Suite 170
Garden City, NY 11530
United States (US)
Phone: (516) 248-9500
Fax: (516) 248-7606

HAUPPAUGE

150 Motor Parkway Suite 401 (Regus)
Hauppauge, NY 11788
United States (US)
Phone: (631) 941-3400
Fax: (516) 248-7606

HARRISON

600 Mamaroneck Avenue, 4th Floor
Harrison, NY 10528
United States (US)
Phone: (914) 701-0777
Fax: (516) 248-7606

MAP

kobrick_sidbr_map

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

Footer

footer-logo
  • Facebook
  • LinkedIn
  • Twitter

The information on this Attorneys & Lawyers / Law Firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

Kobrick and Moccia, Attorneys at Law. Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys

Law Offices of Kobrick and Moccia
Attorney Advertisement
© 2023 American Academy of Estate Planning Attorneys, Inc.