Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
In Massachusetts, an executor (also called a personal representative) must manage estate assets carefully before paying any creditor claims. Confirming available funds ensures you meet fiduciary duties and avoid personal liability.
1. Gather and Secure Estate Assets
First, identify and collect all estate assets, including bank accounts, investments, real property, and personal belongings. Deposit liquid assets into a dedicated estate account to separate them from your personal funds.
2. Prepare an Inventory and Accounting
Mass. Gen. Laws c. 190B, §3-702 requires you to file an inventory of estate assets with the probate court. Maintain accurate records of all receipts and disbursements. This accounting helps you determine the total amount available to pay debts.
3. Review Creditor Claims
Under Mass. Gen. Laws c. 190B, §3-801, creditors must submit claims within prescribed deadlines. Examine each claim for validity and priority. Some debts (e.g., funeral expenses, taxes) receive first priority under Mass. Gen. Laws c. 190B, §3-705 (link).
4. Confirm Available Funds
Massachusetts law prohibits paying more in claims than the estate can cover. Confirm the estate’s cash balance after reserving funds for administrative expenses and priority claims. Maintaining a reserve prevents overpayment and protects you from personal liability under Mass. Gen. Laws c. 190B, §3-701 (link).
5. Distribute Payments in Priority Order
After confirming available funds, pay claims according to priority: administrative costs, funeral and burial, taxes, secured claims, and then unsecured creditors. If assets are insufficient, distribute pro rata among lower-priority creditors.
Helpful Hints
- Open a separate estate bank account to track funds precisely.
- Use probate court forms for inventory and accounting to avoid procedural errors.
- Keep detailed records of communications with creditors and court filings.
- Maintain a cash reserve for unexpected administrative costs.
- Consult a probate attorney if claims are disputed or funds appear insufficient.