How to Determine What Assets Remain in an Estate After Paying Debts and Fees
Detailed Answer
Administering an estate in Mississippi starts with collecting and valuing assets, paying valid debts and fees, then distributing the net property to beneficiaries. Personal representatives follow a statutory order of payment set forth in Miss. Code Ann. § 91-7-291.
1. Inventory and Appraisal
The executor or administrator must file an inventory and appraisement within three months of appointment (Miss. Code Ann. § 91-7-125). This document lists real and personal property with fair market values as of the decedent’s date of death.
2. Identify and Pay Debts
Next, the personal representative notifies creditors and reviews claims. Mississippi law gives creditors up to six months to file claims (Miss. Code Ann. § 91-7-353). The representative must pay:
- Funeral and last illness expenses
- Administration costs (e.g., court fees, bond premiums)
- Secured debts (e.g., mortgages, liens)
- Unsecured debts approved by the court
3. Calculate Fees and Commissions
Mississippi statutes allow personal representatives to collect a commission—typically 5% of the first $100,000 and 3% of the next $250,000 in estate value (Miss. Code Ann. § 91-7-321). Other expenses include attorney fees and appraisal costs.
4. Deduct Taxes and Liens
Federal estate tax (if applicable) and any state inheritance tax must be paid. Also, subtract outstanding mortgages or liens that survive probate. Ensure the estate holds enough liquid assets to cover these charges.
5. Determine the Net Estate
Subtract the total of debts, fees, taxes, and liens from the gross estate value. The result is the net estate. That amount passes to beneficiaries under the will or Mississippi’s intestacy rules (Miss. Code Ann. § 91-1-15).
Helpful Hints
- Start the inventory process early to avoid court penalties.
- Keep detailed records of all payments and communications.
- Review the will for specific payment instructions.
- Consider hiring a qualified accountant for tax calculations.
- Always verify creditor claims before payment.
Disclaimer: This article is for educational purposes only and does not provide legal advice. Consult a licensed attorney for guidance on your specific situation.