Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance tailored to your situation.
Detailed Answer
When someone passes away in Tennessee, their estate enters probate. The personal representative (formerly known as executor) must ensure estate expenses and ongoing bills are paid in the right order and from the correct funds. Tennessee law governs how these costs are handled, the timeline for claims, and the order of priority.
1. Duties of the Personal Representative
The personal representative must:
- Inventory all assets and file it with the court.
- Notify known creditors and publish notice to unknown creditors.
- Pay valid expenses, debts, and taxes from estate assets.
- Keep detailed records of receipts and disbursements.
2. Priority of Payments
Tennessee law sets the order creditors and expenses are paid. Under Tenn. Code Ann. § 30-2-306 (https://www.legislation.tn.gov/titles/30/chapter-2/part-3/section-30-2-306/), priority is:
- Funeral and burial expenses up to $6,000.
- Administration costs (court costs, personal rep’s bond, and reasonable fees).
- Costs of preserving or managing the estate (maintenance, insurance, utilities).
- Family allowance and homestead allowance.
- Other creditor claims in order of filing date.
3. Paying Ongoing Bills
Ongoing bills—like mortgage payments, utilities, insurance, and property taxes—are considered administration expenses. The personal representative uses estate funds to keep property secure and avoid depreciation. If estate assets are cash‐poor, the representative may petition the court for a short-term advance of funds or sale of non-exempt assets.
4. Statutory Commissions and Fees
Personal representatives earn a commission for their service, unless waived in the will or by agreement. Under Tenn. Code Ann. § 30-2-307 (https://www.legislation.tn.gov/titles/30/chapter-2/part-3/section-30-2-307/), commissions are:
- 5% of the first $100,000 of the estate’s personal property.
- 3% of the next $100,000.
- 2.5% of any balance above $200,000.
5. Bond and Insurance Requirements
Unless the will waives bond, Tennessee courts require the personal representative to post a probate bond. This protects the estate against mismanagement. See Tenn. Code Ann. § 30-1-110 (https://www.legislation.tn.gov/titles/30/chapter-1/part-1/section-30-1-110/).
Helpful Hints
- Compile a full list of bills and debts early to avoid missed payments.
- Set up a separate bank account titled “Estate of [Decedent’s Name]” for transparency.
- Keep all receipts and bank statements; you’ll need them for the final accounting.
- Communicate with beneficiaries about the timeline and payment priorities.
- Ask the court for instruction or approval if you’re unsure about paying a claim.
- Consult an estate planning attorney for complex estates or disputes.