Should an executor confirm available estate funds before settling a creditor claim in Delaware? | Delaware Probate

Detailed Answer

As an executor of an estate in Delaware, you have a fiduciary duty to safeguard the estate’s assets and pay valid creditor claims in the correct order. Before settling any claim, confirm that the estate holds sufficient funds. Proper verification prevents depletion of assets needed for other debts and administrative expenses. Under 12 Del. C. § 1902, you may pay claims only after giving notice and within statutory time limits. Failing to ensure available funds can expose you to personal liability for improper distributions.

Follow these steps:

Inventory all assets. Catalog cash, investments, real property, and personal property. An accurate inventory gives you a clear picture of available funds.
Provide creditor notice. Publish notice in a newspaper of general circulation and mail notices to known creditors as required by 12 Del. C. § 1902.
Validate and prioritize claims. Review each claim for accuracy and priority under 12 Del. C. § 1903, which ranks administrative expenses, secured claims, funeral expenses, and general unsecured claims.
Prepare a claims register. List all approved claims with amounts and priority. Compare the total against your verified asset pool.
Allocate and disburse funds. Pay claims in statutory order. If the estate lacks funds to cover all claims, prorate unsecured claims rather than satisfying one creditor in full.

Helpful Hints

Keep detailed accounting records of all receipts and disbursements.
Consult the probate court clerk for approved forms and notice procedures.
Reserve sufficient funds for ongoing administrative costs before paying claims.
Follow the statutory priority of claims to prevent creditor disputes.
If funds run low, communicate clearly with creditors about proration.

Disclaimer: This article provides general information and does not constitute legal advice. Consult a licensed attorney in Delaware for guidance tailored to your situation.