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Detailed Answer

Disclaimer: This is not legal advice. Consult a qualified probate attorney in Nebraska for guidance tailored to your situation.

When a decedent’s estate in Nebraska faces creditor claims, the personal representative (executor or administrator) may need to sell estate property to raise funds to pay valid debts. The Nebraska Probate Code establishes separate procedures for personal property and real estate.

1. Selling Personal Property

Under Neb. Rev. Stat. §30-24,120, a personal representative may sell personal property without prior court approval if the sale is necessary to pay debts, funeral expenses, taxes or court costs. Steps include:

1. Inventory and appraise assets.
2. Advertise the sale (masthead in local paper or online).
3. Conduct a public auction or private sale.
4. Apply proceeds to creditor claims in the statutory priority order.

Statute link: Neb. Rev. Stat. §30-24-120.

2. Selling Real Estate

Real estate sales require court authorization per Neb. Rev. Stat. §30-24,121. The process generally follows these steps:

1. File a petition with the county probate court asking for authority to sell the property.
2. Provide notice of the hearing to all heirs, devisees and creditors.
3. Attend the hearing. If the court finds the sale necessary to satisfy debts, it issues an order directing sale.
4. The court appoints a commissioner to sell the property at public auction or by private sale with competitive bids.
5. After sale, file a report of sale and account for sale proceeds. The court confirms the sale if it was conducted per the order.

Statute link: Neb. Rev. Stat. §30-24-121.

3. Applying Sale Proceeds to Creditor Claims

The personal representative must classify and pay claims in priority order under Neb. Rev. Stat. §30-24,205:

• Administrative expenses (court costs, attorney fees).
• Funeral and burial costs.
• Debts and taxes with a preference under federal or state law.
• General unsecured creditors.

If proceeds exceed claims, remaining funds distribute to beneficiaries per the will or Nebraska’s intestacy rules.

Helpful Hints

• Double-check deadlines for filing and serving notices on creditors (usually within two months of publication of notice to creditors).
• Obtain multiple appraisals of real property to establish fair market value before petitioning the court.
• Keep detailed records of all sales, bids, and distributions to ensure transparent accounting.
• Consider a private sale with court approval when public auctions might yield low bids.
• Consult the Nebraska Probate Code sections on creditor claims (§30-24-205) for priority rules.