Serving as an executor or personal representative means taking on several key forms of responsibility. In addition to securing and distributing resources to beneficiaries, the personal representative must also fulfill the decedent’s financial obligations.
They have a duty to pay certain taxes. They also need to use estate resources to cover debts before they make sizable distributions to beneficiaries or heirs. Mistakes regarding creditor claims are one of the biggest sources of liability for personal representatives. Particularly when people act as a personal representative for a parent or someone else whose finances they do not regularly oversee, they may worry about struggling to identify creditors.
How can personal representatives locate creditors to avoid the risk of personal liability for unpaid debts?
By checking the decedent’s mail
There are many obligations that fall to the personal representative of an estate. They have to start reviewing the incoming correspondence for the deceased individual. Most companies bill on a monthly basis, which means that a few weeks of receiving their mail is adequate to identify most of their major creditors. The personal representative can then send direct notice of the upcoming estate administration so that they can make claims as appropriate against the estate.
By reviewing financial records
Personal representatives often have to use the funds in financial accounts to cover various estate obligations. Having access to credit card statements and bank accounts can make it easy to identify recurring payments. The personal representative can then communicate with creditors and utility companies to shut off services that are not currently necessary. Financial statements can help identify creditors and can provide insight into the amount previously paid for certain recurring obligations.
By publishing official notice
State law also requires the publication of official notice about probate proceedings. The personal representative has to publish notice in a newspaper in the same county as the probate courts overseeing the estate. The notice should run at least once a week for three consecutive weeks. Unknown creditors who may not send direct invoices to the decedent or who may have given up on collecting their debts can then submit claims to the probate courts. While this notice gives unknown creditors an opportunity to make a claim, it also protects the personal representative. They can limit their direct liability by following the right procedures.
Personal representatives may need help ensuring that they fulfill all of their responsibilities. Retaining legal assistance during estate administration can reduce the likelihood of major oversights. Personal representatives who have support and guidance can fulfill their obligations while minimizing their liability.