Detailed Answer
Before settling any creditor claim, an executor in Rhode Island must verify available estate funds. Under R.I. Gen. Laws § 33-7-16, the personal representative must file a complete inventory of assets with the probate court within 30 days of appointment. Without a clear picture of cash balances, bank accounts, investment holdings, and other liquid assets, the executor cannot accurately assess if funds suffice to pay all valid claims.
Rhode Island’s probate statute establishes a priority order for paying claims. See R.I. Gen. Laws § 33-15-1 and § 33-15-3. The law directs payment of administrative expenses, funeral expenses, taxes, secured and unsecured claims in sequence. If the estate lacks sufficient liquid assets at one tier, lower-priority claims may remain unpaid.
Failing to confirm funds before payment exposes the executor to personal liability. Rhode Island holds executors personally responsible for improper distributions. Executors should review current account statements, factor in probate costs, pending taxes, and reserve adequate funds for unforeseen debts. When in doubt, seek probate court approval before issuing payment.
Helpful Hints
- Gather recent bank and brokerage statements to verify cash availability.
- Prepare an interim accounting to track incoming and outgoing funds.
- Maintain a reserve for probate fees, taxes, and administrative costs.
- Review creditor claim deadlines and notice requirements.
- Consult a probate attorney or accountant when asset valuations fluctuate.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.