Disclaimer: This article provides general legal information and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation.
Detailed Answer
After a person dies in Massachusetts, the appointed personal representative (executor) must settle the estate’s liabilities before distributing assets to beneficiaries. Follow these steps to determine what remains:
1. Identify and Value Estate Assets
The personal representative compiles an inventory of probate assets, including real estate, bank accounts, investment accounts, and personal property. Massachusetts law requires filing a list of assets and values with the probate court. Documentary evidence—bank statements, appraisal reports, and real estate deeds—supports your valuation.
2. Pay Funeral and Administration Expenses
First, pay reasonable funeral expenses and costs of estate administration. Under M.G.L. c.190B §3-801 (claims against estate), creditors must present claims within six months of the representative’s appointment. The personal representative reviews, admits, or objects to each claim.
3. Settle Valid Debts and Taxes
After due notice to creditors, pay approved claims in this order: funeral bills, administration costs, mortgages or liens on estate property, other debts, and state or federal taxes. Massachusetts tax claims may include estate tax under M.G.L. c.65C and income tax obligations for the decedent’s final tax year.
4. Pay Personal Representative Fees and Court Costs
The personal representative may receive compensation under M.G.L. c.190B §3-703 (compensation of personal representative). Court costs also come from estate assets. Deduct these fees before calculating the net distributable estate.
5. Calculate the Net (Distributable) Estate
Subtract the total of all debts, funeral and administration expenses, taxes, personal representative fees, and court costs from the gross estate value. The resulting figure is the net or distributable estate. These remaining assets pass to beneficiaries under the will or, absent a will, by intestate succession rules in M.G.L. c.190B §§2-101 to 2-114.
Hypothetical Example
Imagine the decedent’s probate assets include $200,000 in real estate equity, $50,000 in bank accounts, and $10,000 in personal property (total $260,000). The estate incurs $10,000 in funeral and administration costs, $30,000 in creditor claims, $5,000 in taxes, and $8,000 in personal representative fees and court costs. Deducting $53,000 in expenses from $260,000 leaves $207,000 as the net distributable estate.
Helpful Hints
- Begin compiling your asset inventory immediately after appointment to avoid valuation disputes.
- Provide timely notice to creditors as required under M.G.L. c.190B §3-801.
- Obtain appraisals for real estate and valuable personal property to establish accurate values.
- Document all payments and keep detailed accounting records for court approval.
- Consult a probate attorney if you face complex claims or taxation issues.