Estate Liabilities

Estate liabilities are everything the deceased estate owes: mortgages, credit-card balances, personal loans, utility accounts, funeral costs, tax and the expenses of administration. The executor must settle these from estate assets before any estate distribution to beneficiaries. Debts do not simply disappear at death — but they are paid from the estate, not personally by the family, unless someone was a co-borrower or guarantor.

Liabilities are paid in a legal order of priority, with funeral and administration expenses typically ranking first. Example: "After the funeral, the mortgage and the ATO were paid, the estate liabilities left just $90,000 for the two beneficiaries to share." If liabilities exceed assets, the estate is an insolvent estate and special rules apply.