In a simple will, the payment of debts clause indicates that expenses of your last sickness, memorial service, funeral, and similar expenses should be paid within a reasonably short time after your death. The clause also indicates that your debts should not be paid back any sooner than they are actually owed and that creditors who wish to collect on your debts have to follow the required claims procedures. Lastly, the clause states that the clause itself should not be interpreted as giving any creditor a claim against your estate.
The payment of debts clause is a reminder to your personal representative of certain responsibilities, and a way of encouraging your personal representative to keep the probate process moving along. The payment of debts clause merely restates requirements that already exist elsewhere under the law. Whether or not you include this clause in your will, your personal representative will still have to pay these expenses, and creditors will still have to follow the required claims procedures. Nonetheless, we encourage you to include this clause in your will.
Required Reading
Payment of Debts
When you pass away, the debts you had while alive become the debts of your estate. With limited exceptions, your personal representative must ensure that all of your estate’s debts can be paid from the assets of your estate before any beneficiary will receive gifts you make in your will.
Requirements Creditors Must Follow
Washington State has several statutes that place certain timing and notice requirements on your creditors who wish to make a claim against your estate after you have passed away. When drafting your will, you may find it helpful to have at least a basic idea of how the creditor claims process will work after you have passed away.
Inheritance of Debts
No matter how much or how many debts you have while alive, your children and other heirs will not inherit your debts when you pass away. However, when a beneficiary inherits property that is security for a debt that has not been repaid, such as a home that secures repayment of a home loan through a mortgage, the beneficiary takes the property subject to the security interest.
Family Support Award
The family support award is a limited exception to the rule that a beneficiary cannot receive a gift from an estate when the debts of the estate cannot all be repaid. When making gifts of your property, consider the effect the family support award might have on the distribution of the property of your estate.
Write Your Payment of Debts Clause
Open your copy of the simple will and locate the payment of debts clause. We recommend that you leave the entire clause as we have drafted it in place, with one exception. If you prefer that your body not be cremated, you should erase “cremation,” from the list of expenses to be paid.
Payment of Debts Clause: Cremation (Optional)
3. PAYMENT OF DEBTS AND MEMORIAL REQUESTS
3.1 Payment of Debts. I hereby direct that all my lawful debts and the expenses of my last sickness, memorial service, funeral, cremation, and testamentary expenses be paid […]
Example of a Payment of Debts Clause
Below is an example of how the entire payment of debts clause will look, assuming you left the phrase “cremation,” in place.
3. PAYMENT OF DEBTS AND MEMORIAL REQUESTS
3.1 Payment of Debts. I hereby direct that all my lawful debts and the expenses of my last sickness, memorial service, funeral, cremation, and testamentary expenses be paid by my Personal Representative hereinafter named, as soon after my demise as is practicable; provided, however, that this direction shall not authorize any creditor to require payment of any debt or obligation prior to its normal maturity in due course. This direction shall not be construed as giving any creditor a claim against or interest in my estate. My Personal Representative may refuse payment to any creditor who has not timely and properly filed a creditor’s claim under applicable probate laws.
Once you have finished editing your payment of debts clause, go back to the list of instructions.
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