E301 How the Recession Affects Probate

<p>Economic recession affects probate, just as much as wages, gas, and your grocery bill. We’ll share a few ways we’ve seen how it’s been impacting probates.</p> <h2>Takes longer to collect probate assets</h2> <p><img class="aligncenter size-medium wp-image-43258" src= "https://anthonyspark.com/wp-content/uploads/2023/01/Takes-longer-to-collect-probate-assets-300x169.jpg" alt="Takes longer to collect probate assets" width="300" height= "169" /></p> <p>First, there are major delays in collecting assets. Banks, brokerages, unclaimed funds, etc. are taking way longer than usual to process claims and release funds. They are asking for more documents and are stricter in their requirements. In the past, these financial institutions let some things slide, but now they want all the T’s crossed and I’s dotted. They may just be rigorous in their requirements now. But another interpretation is that they want to keep the money in their accounts as long as possible.</p> <p>This results in delays for the executor and heirs. The key takeaway is to start the process now!</p> <h2>Creditors will not settle</h2> <p><img class="aligncenter size-medium wp-image-43260" src= "https://anthonyspark.com/wp-content/uploads/2023/01/Creditors-will-not-settle-300x169.jpg" alt="Creditors will not settle" width="300" height="169" /></p> <p>Historically, regarding an estate debt (exs. credit card or medical bills), creditors were willing to negotiate the bill down. It used to just take a phone call to get even 50% off easily.</p> <p>Now creditors want full payment. Some will even wait as long as it takes or even sue the estate. The notion of debts getting discharged or reduced isn’t happening. The takeaway: don’t count on getting the debt reduced to increase the amount the heirs will receive. Just assume that debts will be paid in full.</p> <p>This seems odd, considering we’ve been through recessions before. Even then, creditors were willing to settle estate debts to guarantee cash in hand. It is unclear what makes creditors so aggressive now.</