Disclaimer: This article is for general informational purposes and does not provide legal advice.
Detailed Answer
Preliminary Steps
After the probate court appoints a personal representative, they must secure and inventory assets within four months (Probate Code § 8800). This provides a clear picture of available funds to cover ongoing obligations.
Paying Initial and Ongoing Expenses
California law allows the representative to pay necessary administrative costs before formal creditor approval. Under Probate Code § 9400, they may cover filing fees, appraisal costs and utility bills to preserve estate property. They must record each payment for court review.
Prioritizing Debts and Expenses
The Probate Code outlines a strict order for distributing estate funds (§ 13100 et seq.). Key priority classes include:
- Administrative expenses (fees, court costs, appraiser’s fees).
- Family allowances and funeral costs (up to $7,000 under § 6450).
- Wages and taxes owed by the decedent.
- General unsecured creditors’ claims.
Interim Distributions
The representative may seek court approval for partial distributions if the estate holds surplus cash beyond expected debts. Under Probate Code § 10850, beneficiaries can receive funds before final accounting once claims are resolved or waived.
Best Practices for Cash Flow Management
- Open a separate estate bank account for all receipts and payments.
- Obtain court authorization before large disbursements.
- Track deadlines: creditor claims must be filed within four months of notice (Prob. Code § 9050).
- Maintain clear records and submit periodic status reports to the court.
Helpful Hints
- Use California Courts’ probate forms and checklists: courts.ca.gov/forms.
- Verify personal representative allowances under Prob. Code § 9600.
- Communicate regularly with beneficiaries to manage expectations.
- Keep copies of all paid bills and creditor waivers for the final accounting.
- Consult a qualified probate attorney for complex estates or disputes.