Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified probate attorney in Oregon for guidance on your specific situation.
Detailed Answer
When someone passes away in Oregon, their estate must settle debts and ongoing bills through the probate process. The court appoints a personal representative to gather assets, pay expenses, and distribute the remainder to heirs. Managing estate expenses and ongoing bills requires adherence to Oregon law, clear record-keeping, and court oversight.
1. Appointment and Authority of the Personal Representative
Under ORS 116.107 the probate court appoints a personal representative (often called an executor or administrator). Once the court issues Letters Testamentary or Letters of Administration, the representative gains formal authority to act on behalf of the estate:
- Collect and protect estate assets
- Pay debts, claims, and administrative expenses
- Maintain property and handle ongoing bills
Reference ORS 116.107: https://www.oregonlegislature.gov/bills_laws/ors/ors116.html#116.107
2. Opening and Maintaining an Estate Bank Account
The personal representative should open a separate estate bank account immediately after appointment. ORS 116.087(1)(g) authorizes payment of “expenses reasonably necessary for the administration, preservation or protection of the estate.” A dedicated account prevents commingling personal and estate assets, simplifies accounting, and provides a clear audit trail.
Reference ORS 116.087: https://www.oregonlegislature.gov/bills_laws/ors/ors116.html#116.087
3. Prioritizing and Paying Claims and Expenses
ORS 114.210 outlines priority allowances for funeral expenses, administration fees, and other essential claims. Generally, the estate must pay in this order:
- Funeral and burial costs (reasonable amounts)
- Estate administration expenses (attorney fees, court costs) under ORS 114.210
- Ongoing bills—utilities, mortgage or rent, property taxes—to avoid penalties or property loss
- Creditor claims filed within the notice period (see ORS 115.105)
Reference ORS 114.210: https://www.oregonlegislature.gov/bills_laws/ors/ors114.html#114.210
Reference ORS 115.105: https://www.oregonlegislature.gov/bills_laws/ors/ors115.html#115.105
4. Handling Insufficient Estate Assets
If estate funds cannot cover all bills, the representative must seek court approval to sell nonexempt property under ORS 116.087(1)(e). The representative should not use personal funds to pay estate debts unless they maintain detailed receipts for reimbursement from the estate later.
5. Reporting and Final Accounting
Oregon law requires the representative to file an inventory of assets and periodic accountings (ORS 116.083). The inventory lists assets and liabilities. Accountings show all deposits, disbursements, and the current balance. Both the court and beneficiaries review these reports before final distribution of remaining assets.
Helpful Hints
- Notify known creditors and publish notice in a local newspaper within 30 days (ORS 115.105).
- Keep detailed receipts and logs for every expense paid from the estate.
- Maintain a dedicated estate bank account to avoid financial commingling.
- Pay mortgage, rent, and utilities promptly to protect real property and avoid liens.
- File inventories and accountings timely to prevent court delays.
- Consider bonding requirements if the court or beneficiaries request extra protection.
- Consult an Oregon probate attorney if the estate holds complex assets or if disputes arise.