Disclaimer: This information is for educational purposes only and does not constitute legal advice. For guidance tailored to your situation, consult a qualified Pennsylvania probate attorney.
Detailed Answer
During probate in Pennsylvania, the personal representative (executor or administrator) must protect estate assets and pay valid expenses before distributing inheritances. Pennsylvania law provides specific procedures to manage estate expenses and ongoing bills efficiently.
1. Identify and Inventory Assets
The personal representative files a petition for probate or letters of administration with the register of wills. They then prepare an inventory of assets, including real property, bank accounts, investments, and personal items. This inventory establishes the estate’s value and underpins expense management.
2. Provide Notice to Creditors
After receiving letters, the representative must publish a notice to creditors in a local newspaper and send direct notice to known creditors. Pennsylvania law sets deadlines for filing claims:
- General creditors have six months from notice publication to submit claims.
- Claims by the Commonwealth and municipalities have nine months.
See 20 Pa.C.S. § 3180 for details: 20 Pa.C.S. § 3180.
3. Secure Estate Assets
To prevent loss, the representative may need to:
- Change locks on real property.
- Ensure adequate insurance coverage.
- Maintain utilities and property upkeep.
If the representative is not a bond-exempt close relative, the register of wills will require a surety bond under 20 Pa.C.S. § 3121: 20 Pa.C.S. § 3121. The bond protects the estate against mismanagement.
4. Pay Ongoing Bills and Administrative Expenses
Once claims are permitted, the personal representative pays valid expenses in this order (20 Pa.C.S. § 3171):
- Costs of administration (court fees, executor commissions, attorney fees).
- Reasonable funeral expenses and taxes.
- Claims of creditors, including ongoing bills (utilities, mortgages, insurance).
Consult 20 Pa.C.S. § 3171 for specific priority rules: 20 Pa.C.S. § 3171. Maintain a separate estate checking account to track payments.
5. Seek Court Approval for Major Transactions
For large expenses, such as selling real estate to cover debts, petition the court for approval. The court reviews the necessity and fairness of such transactions before granting permission.
Helpful Hints
- Open an estate bank account immediately after appointment.
- Keep detailed records of all receipts, invoices and bank statements.
- Respond promptly to creditor inquiries to avoid litigation.
- Notify utility companies and insurers of the decedent’s death and estate representative status.
- Consult an attorney before selling assets or undertaking major financial decisions.