One of the things that Miami residents may forget when engaging in estate planning is how their debts will be dealt with when they are gone. Some may think that creditors’ claims may die with a decedent, yet as long as there are assets in an estate, creditors may lay claim on them as payment for what they are owed. That is why it is recommended that people make an accurate accounting of both their assets and liabilities in their estate planning documents so that their beneficiaries do not feel blindsided when creditors come to collect.
The case of the former CEO of an Oklahoma-based energy company highlights some of the issues that estate representatives may be left to deal with when liabilities are not seen to by a decedent before he or she passes. The man, who died in a car accident last year, had been accused of stealing materials from the company before being fired as its CEO in 2013. It is alleged that he then used that information to start a rival company. The company had been seeking $445 million in damages stemming from the alleged theft, while the man’s estate filed its own claim over unpaid benefits stemming from the man’s separation agreement with the company. Both sides have since agreed to drop their claims pending the approval of a proposed settlement by the probate court.
While many may consider their estates to be too meager to warrant the attention of their creditors once they are gone, they are still advised to see to all matters in order to save those who will ultimately have to administer their estates the added stress. Those looking to address the potential liabilities linked to their estates may be wise to consult with an attorney when doing so.
Source: MarketWatch “Chesapeake settles legal dispute with Aubrey McClendon’s estate” Feb. 13, 2017
