Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
In Maryland, a personal representative (often called an executor) has a legal duty to identify and secure all estate assets before paying creditor claims. Confirming available funds ensures you follow statutory procedures and avoid personal liability.
First, conduct a full inventory of assets, including cash accounts, investment accounts, real property, and life insurance proceeds. Under Maryland Code, Estates & Trusts §7-103, you must publish notice to creditors and identify potential claims (Est. & Trusts §7-103).
Next, review the payment priority. Maryland Code, Estates & Trusts §6-103 ranks estate debts: administration expenses, funeral and burial costs, medical expenses of last illness, taxes, and then other creditor claims (Est. & Trusts §6-103). Always confirm your liquid assets cover higher-priority debts before paying lower-priority claims.
When you pay claims, follow Estates & Trusts §8-101, which requires payments in the statutory order and prohibits disbursing funds if the estate lacks sufficient assets (Est. & Trusts §8-101). Failing to confirm funds can expose you to personal liability for unauthorized or premature distributions under Maryland Code, Estates & Trusts §8-103.
In practice, reconcile bank statements, review investment balances, and verify any proceeds from asset sales. Document all account balances at key milestones: after inventory, before each major payment, and before final distribution. If funds run low, you may need to seek court approval or petition for additional assets (e.g., real property sale) before settling outstanding claims.
Helpful Hints
- Gather all estate account statements and valuations before addressing any creditor claim.
- Create a spreadsheet to track asset values, priority debts, and payment dates.
- Consult Maryland probate court rules for notice deadlines and filing requirements.
- Keep detailed records of each payment, including copies of checks or electronic transfers.
- If funds dip below required levels, seek court guidance to avoid personal exposure.