Should an Executor Confirm Available Estate Funds Before Settling a Creditor Claim?
Detailed Answer
As an executor in Washington, you carry a fiduciary duty to preserve estate assets, pay valid debts, and distribute the remaining property to heirs and beneficiaries. Before you settle any creditor claim, you must verify that the estate holds enough liquid funds to satisfy the claim without jeopardizing payment of higher‐priority obligations.
1. Inventory and Appraisal of Assets
Under RCW 11.76.090, you must file an inventory showing all estate assets, including bank accounts, cash on hand, securities, and personal property. This step confirms the total value of estate funds available to pay creditors.
RCW 11.76.090
2. Notice to Creditors and Claim Filing Deadline
Washington law requires you to give notice to known and potential creditors. Creditors then have four months after the first publication of notice to present their claims (RCW 11.40.030). Do not pay any claims until that period has expired or until you confirm a claim is timely and valid.
3. Prioritizing and Paying Claims
RCW 11.40.060 establishes the priority of claims. You must pay administration expenses (filing fees, attorney fees) first, then funeral expenses, last illness medical bills, and other claims in statutory order. Always ensure you have sufficient funds in the estate bank accounts or from liquidated assets before issuing payments.
RCW 11.40.060
4. Liquidating Assets If Funds Are Insufficient
If the estate lacks cash, you may need to sell non–cash assets (real property, personal property) under court approval. RCW 11.28.185 outlines how to petition the court for authority to sell estate property. Proceed carefully to avoid breaching your duty to preserve estate value.
Helpful Hints
- Open a dedicated estate bank account to track receipts and disbursements.
- Use the court’s inventory form to list all assets accurately.
- Keep copies of all notices sent to creditors and proofs of publication.
- Before selling property, obtain at least two independent appraisals to show fair market value.
- Maintain clear records of every claim you receive and how you resolved it.
Disclaimer: This article is for educational purposes only. It does not constitute legal advice. Consult a licensed attorney for guidance on your specific situation.