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Detailed Answer

Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.

When you act as a personal representative (executor or administrator) in Maryland, you must identify, evaluate, and pay creditor claims according to the Maryland Estates and Trusts Code. Follow these key steps to manage and prioritize claims effectively:

1. Gather Estate Information: Compile the decedent’s financial records, including outstanding bills, loans, credit-card statements, and tax obligations. Prepare an inventory of assets and liabilities.
2. Offer Notice to Creditors: Promptly publish a notice in a local newspaper and mail direct notice to all known creditors. Maryland law requires publication and mailing within 30 days of appointment. (See Md. Est. & Trusts § 7-102(a): mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=ested&section=7-102.)
3. Claims Period: Known creditors must file their claims within six months of notice; unknown creditors have up to one year from the date of the decedent’s death. After the deadline, you may disallow late claims.
4. Review and Allow or Deny Claims: Examine each claim for validity. Record allowed claims in the estate account. If you deny a claim, notify the creditor in writing. The creditor may petition the Register of Wills or Orphans’ Court to resolve disputes.
5. Prioritize Payments: Maryland law dictates the payment order when the estate has limited funds. Under Md. Est. & Trusts § 7-201 (mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=ested&section=7-201), you must pay in this sequence:
   • Administration expenses (court costs, attorney fees, personal representative commissions);
   • Funeral and burial expenses (reasonably incurred);
   • Debts and taxes with preference under federal or state law;
   • All other allowed claims;
   • Residue to heirs or beneficiaries.
6. Handle Insolvent Estates: If assets cannot cover all claims, pay in statutory priority order. Notify lower-priority creditors of insufficient funds.
7. Maintain Detailed Records: Keep copies of notices, claims, correspondence, and bank statements. Prepare an accounting for the Register of Wills and interested parties.
8. Seek Court Approval: File the final account with the Register of Wills or Orphans’ Court. Obtain discharge once the court approves distributions and closes the estate.

Helpful Hints

• Start the notice process immediately upon appointment to avoid personal liability.
• Use a claims-log spreadsheet to track filing dates, amounts, and statuses.
• Verify all creditor claims against estate bank statements before payment.
• Consult Md. Est. & Trusts §§ 7-101 through 7-109 for detailed timelines and procedures.
• When in doubt, discuss complex or disputed claims with an estates attorney to limit liability.