Estate Planning & Probate Specialists

Estate Planning & Probate Specialists

  1. Home
  2.  → 
  3. Estate Administration
  4.  → Executor duties series: Paying creditors and taxes

Executor duties series: Paying creditors and taxes

So far in our executor duties series, we have identified the first two steps an executor of an estate should take. Those were to locate and secure all assets and to consolidate all estate funds into a newly formed estate account. That brings us to the third task of an executor, which is to notify and pay all creditors of the estate, as well as file any unfiled tax returns.

Most executors have no idea what outstanding debts a decedent owed at their time of passing. As such, a requirement of every probate court is that an executor have a Notice to Creditors published once a week, for three consecutive weeks, in a general newspaper covering the county in which the decedent lived. Once this publication has run for the required amount of time, a proof of publication must be obtained from the newspaper office and filed with the probate court.

In addition to the publication notice, an executor is also responsible for mailing certified letters to all known creditors advising of the decedent’s death and requesting that a claim be filed. Depending on the state, creditors are allowed a certain amount of time to file a claim before it is barred. If the claim is not filed with the probate court within the allotted amount of time, the probate judge may disallow payment. This means that the estate is no longer responsible for the amount owed.

However, the executor must be able to provide the court with proof that a creditor was notified. Mailing the notices via certified mail provides a receipt that can be filed into the court record as proof. All claims that are filed by creditors in a timely manner, and deemed payable, should be paid out of the estate checking account and a payment receipt must be obtained.

Finally, if there are any outstanding tax returns of the decedent, it is an executor’s duty to make sure they get filed. Any expenses related to this task may also be paid from an estate account with the decedent’s funds but must be accounted for in a final accounting report prior to final disbursements. Navigating these duties can become quite confusing without the help of an estate attorney. This will ensure you understand your rights throughout the process and can take steps to better protect them.