Disclaimer: This article is for informational purposes only and does not constitute legal advice. You should consult a qualified attorney regarding your specific situation.
Detailed Answer
1. Appointing a Personal Representative
In Delaware, the court appoints a personal representative (often called an executor or administrator) to manage the decedent’s estate (12 Del. C. § 3903). The personal representative gains exclusive authority to collect assets, pay debts, and distribute property.
2. Establishing an Estate Account
Open a dedicated estate bank account to separate estate funds from personal assets. Deposit all incoming funds—such as proceeds from sales of real estate or bank accounts—into this account. Pay all estate expenses and ongoing bills from it. This practice creates a clear audit trail.
3. Identifying and Prioritizing Expenses
The personal representative must identify funeral costs, taxes, creditor claims, and administrative costs. Delaware law specifies the payment priority: administrative expenses first, then secured claims, followed by unsecured creditors, and finally distributions to beneficiaries (12 Del. C. § 3915).
4. Paying Ongoing Bills
Common ongoing expenses include mortgage payments, utilities, property insurance, and maintenance. The representative uses the estate account to keep these obligations current. Communicate promptly with service providers and mortgage lenders to notify them of the death and provide representative contact information.
5. Seeking Court Approval When Needed
Some transactions—such as selling real estate—require court approval or notice to interested parties. File a petition with the Court of Chancery or the Register of Wills, depending on the estate’s value and complexity. Retain court orders authorizing significant transactions.
6. Utilizing Surety Bonds
Delaware may require the personal representative to post a surety bond to protect the estate against mismanagement (12 Del. C. § 3905). The bond amount typically matches the estate’s value. In some wills, the decedent waives the bond requirement.
Helpful Hints
- Create and maintain a detailed ledger of all income and expenses.
- Notify creditors promptly by publishing required notices in local newspapers.
- Keep beneficiaries informed of major decisions and disbursements.
- Consult an accountant for guidance on estate tax returns and deadlines.
- Meet all filing deadlines to avoid personal liability as a representative.