Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney in Maryland to address your specific situation.
Detailed Answer
Notice to Creditors
Once appointed by the Orphans’ Court, the personal representative (or “executor”) must publish a Notice to Creditors in a local newspaper and mail written notice to known creditors. Under Maryland Code, Estates & Trusts §7-103 (link), this alerts creditors to submit claims against the estate.
Waiting Period for Claims
After first publication, creditors have six months to file claims. The personal representative must review and allow or reject each claim within 90 days of filing, per §7-302.
Filing a Petition to Sell Estate Property
If estate assets are insufficient to cover valid claims, the personal representative may petition the Orphans’ Court for permission to sell estate property. Under §8-102 (link), the petition must:
- Describe the property proposed for sale (real or personal).
- Itemize outstanding creditor claims and administrative expenses.
- Explain why sale is necessary to satisfy liabilities.
Orphans’ Court Order
The Court will schedule a hearing and notify heirs, legatees, and other interested parties. If the Court finds the sale necessary and fair, it issues an order authorizing the sale, often setting minimum bids or other conditions.
Conducting the Sale and Distributing Proceeds
After obtaining the order, the personal representative must advertise the sale as required by the order and state law. Once the property sells, the personal representative files a report of sale with the Court. Proceeds first cover administrative costs and creditor claims. Any remaining funds pass to heirs or beneficiaries under the will or Maryland’s intestacy laws.
Helpful Hints
- Start creditor notice promptly to avoid missing the six-month claims deadline.
- Keep detailed records of all creditor communications and claim decisions.
- Consult the Orphans’ Court clerk to confirm filing requirements and fees.
- Obtain professional appraisals for real property to support fair market value.
- Notify heirs and interested parties early to reduce objections at the sale hearing.
- Work with a probate attorney if complex claims or multiple creditors exist.