Managing Estate Expenses and Ongoing Bills in South Dakota Probate
Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
When someone dies in South Dakota, a personal representative (often called an executor) must gather assets, pay debts and distribute property under SDCL 29A-3-1001. Managing estate expenses and ongoing bills during probate involves these key steps:
1. Appointment of the Personal Representative
The court issues Letters Testamentary or Letters of Administration. These letters grant authority to act, including paying bills and expenses. Without court approval, payments may not be enforceable.
2. Identifying Estate Expenses and Ongoing Obligations
Estate expenses include funeral costs, taxes, insurance premiums, mortgage payments and utility bills. Ongoing obligations may involve rent, maintenance, or subscriptions.
3. Prioritizing Payments
South Dakota law sets a priority for claims. Reasonable funeral and administration costs come first, followed by secured debts, expenses of administration, and unsecured claims (SDCL 29A-3-1001).
4. Using Estate Funds
The personal representative deposits estate assets into a dedicated estate account. They must keep clear records and only disburse funds for valid estate debts and expenses.
5. Court Approval for Extraordinary Payments
Some expenses—such as selling real estate or paying large claims—may require court approval. The personal representative should file a motion and notify heirs and creditors.
6. Interim Distributions
If the estate has sufficient liquidity, the personal representative can make interim distributions to beneficiaries after paying priority claims. They should keep beneficiaries informed and obtain a court order if necessary.
Helpful Hints
- Keep all invoices, statements and receipts organized in a single folder or electronic file.
- Open a separate estate bank account to avoid mixing personal and estate funds.
- Review South Dakota probate statutes—especially SDCL 29A-3-304—for the personal representative’s powers and duties.
- Communicate regularly with heirs and creditors to reduce disputes and delays.
- Consult a licensed attorney if you face complex assets, tax issues or potential creditor challenges.