My spouse died, leaving more debts than assets. As executor, what should I do?
My spouse's credit card debt exceeds the assets he left behind. All the credit cards were in his name only. Should I send letters to his creditors? Is there something else I should do instead?
When someone dies leaving debts that exceed the assets in their estate, this is called an insolvent estate. The personal representative has a choice about how to proceed. They may either administer the estate, or turn the assets over to a licensed insolvency trustee. This is a professional who handles situations involving debts.
If the personal representative elects to administer the estate, they should advertise for creditors (see ten steps to settling an estate, in step 6, for how to do this). If the personal representative takes this step, they must wait 30 days to see if any creditors come forward with a claim against the estate. If no creditors make a claim, the personal representative can carry on with administering the estate.
(By contrast, if the personal representative writes to the creditors directly, the estate is potentially liable for the debt until the creditor responds, which can be an indeterminate amount of time.)
The personal representative should also consider applying under s. 39 of the Trustee Act for an order to distribute the estate under the direction of the court. They can ask that the order allow them to distribute the estate having regard only to the claims of people they've been able to locate. The order can say the personal representative is not liable to any person they didn't have notice from at the time of distribution of the estate.