Detailed Answer
In Missouri, an executor (also called a personal representative) must confirm that the estate holds sufficient funds before paying any creditor claim. This step protects both the estate and the executor from personal liability.
1. Inventory and Appraisal of Estate Assets
Under Missouri Revised Statutes §473.360, an executor must file a detailed inventory and appraisal of all estate assets with the probate court within 90 days of appointment. This inventory provides an accurate snapshot of liquid assets—cash, bank accounts, and marketable securities—that are available to pay debts and expenses. Without a proper inventory, an executor cannot reliably determine whether the estate can cover a creditor’s claim.
2. Priority and Payment of Creditor Claims
Missouri law sets a strict order for paying debts. Per §473.150, the estate must first satisfy funeral expenses, administrative costs, federal and state taxes, and other priority claims. Only after these have been paid can the executor distribute funds to nonpriority creditors. Before issuing payment, the executor must verify the estate’s cash balance to ensure compliance with this payment hierarchy.
3. Confirming Available Funds
To confirm available funds, the executor should:
- Obtain recent bank statements and transaction histories.
- Reconcile estate receipts and disbursements since appointment.
- Maintain a ledger or accounting showing current cash balance.
If the estate lacks sufficient liquid assets, the executor cannot pay all claims in full. In that scenario, the executor must:
- Notify creditors in writing of potential pro rata distribution.
- Seek court guidance on selling nonliquid assets (e.g., real estate) to raise funds.
4. Consequences of Ignoring Asset Verification
Failing to confirm funds before paying a claim can expose an executor to personal liability. Creditors may pursue the executor directly if the estate runs dry. Additionally, the probate court may surcharge the executor for mismanagement under §473.787.
Helpful Hints
- Keep all asset records organized and updated.
- Consult the probate court’s online portal for deadlines and forms.
- Use dedicated estate bank accounts to avoid commingling personal funds.
- Notify all known creditors of the probate filing within 30 days (see §473.020).
- Consider informal creditor meetings to negotiate payment timelines.
Disclaimer: This article provides general information under Missouri law. It does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.