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Detailed Answer
When a personal representative (executor) settles creditor claims against an estate in Montana, confirming available estate funds is vital. The Montana Uniform Probate Code (UPC) imposes clear duties on executors to collect assets, evaluate claims, and distribute funds without exceeding the estate’s resources.
1. Collect and Inventory Assets
Under Mont. Code Ann. § 72-3-706, the executor must identify, gather, and safeguard all estate assets. This includes filing a complete inventory and appraisal within 30 days of appointment. A thorough inventory reveals liquid assets (bank accounts, investments) and non-liquid assets (real estate, personal property).
2. Review and Allow Claims
Creditors must present their claims within the time frame set by Mont. Code Ann. § 72-3-902. The executor reviews each submission and must allow or disallow it in writing under Mont. Code Ann. § 72-3-909. Only claims properly presented and allowed qualify for payment.
3. Prioritize Payments
Mont. Code Ann. § 72-3-811 establishes the order of distribution: administrative expenses and funeral costs first, then secured claims, then unsecured claims. The executor must confirm funds cover higher-priority obligations before addressing lower-priority creditors.
4. Confirm Available Funds Before Payment
Executors should reconcile estate bank accounts, cash on hand, and any proceeds from asset sales. Verifying available funds ensures the estate does not over-distribute and breach the executor’s fiduciary duty. If the estate lacks sufficient funds, the executor must pause distributions and may need to petition the court for instructions or approval.
5. Seek Court Guidance When Necessary
If asset values are uncertain or if creditors dispute claim allowances, the executor can petition the probate court under Mont. Code Ann. § 72-3-923 for directions. Court approval can shield the executor from personal liability when making difficult distribution decisions.
Helpful Hints
- Open a dedicated estate bank account to segregate estate funds from personal assets.
- Keep a detailed ledger of all deposits and disbursements for transparency.
- Obtain written acknowledgments for each allowed claim to document approvals.
- Track the deadline for filing creditor claims under Mont. Code Ann. § 72-3-902.
- Consult the probate court clerk if you encounter insufficient funds or claim disputes.