Executor’s Duty to Confirm Estate Funds Before Paying Creditor Claims

Detailed Answer

Before you settle any creditor claim, confirm that the estate has sufficient liquid assets. Under Nebraska law, a personal representative must notify known creditors and allow them to file claims within ten months of the decedent’s death (Neb. Rev. Stat. § 30-2461). During this period, you also must collect, appraise and inventory estate assets (Neb. Rev. Stat. § 30-2485).

If a valid creditor claim exceeds available estate funds, you cannot pay it in full right away. Nebraska prioritizes claims under Neb. Rev. Stat. § 30-2463. When cash is insufficient, you must prorate payments or convert other assets to cash. Failing to verify funds or overpaying a creditor can expose you to personal liability for mismanagement.

For example, imagine an estate with a $50,000 checking account and a rental property valued at $200,000. A creditor files a valid $60,000 medical bill. You should confirm the checking account balance before approving the claim. If you lack sufficient cash, you may need to sell the rental property, negotiate a prorated payment among creditors, or seek court approval for a delayed distribution.

Helpful Hints

• Review recent bank statements to confirm available cash before approving claims.
• Obtain timely appraisals for real property and illiquid assets.
• File your inventory within three months to comply with Neb. Rev. Stat. § 30-2485.
• Apply the priority rules in Neb. Rev. Stat. § 30-2463 when funds fall short.
• Maintain detailed records of all transactions, including invoices and receipts.
• Consult a qualified Nebraska probate attorney if you encounter complex claims or insolvency issues.

Disclaimer: This article provides general information about Nebraska probate law and does not constitute legal advice. Always consult a qualified attorney to address your specific situation.