Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.
Detailed Answer
1. Role of the Personal Representative
In Indiana probate, the personal representative (PR) administers the decedent’s estate. After appointment under Indiana Code §29-1-6-1 (IC 29-1-6-1), the PR collects assets, secures property, and opens an estate bank account. The PR must act in the estate’s best interest, keep records, and avoid personal liability.
2. Notifying Creditors and Filing Claims
Within three months of appointment, the PR must notify known creditors and publish a notice in a local newspaper under Indiana Code §29-1-8-1 (IC 29-1-8-1). Creditors typically have six months to file claims under §29-1-8-3 (IC 29-1-8-3). Proper notice limits potential unknown liabilities.
3. Paying Estate Expenses and Debts
Indiana Code Title 29, Article 1, Chapter 14 outlines payment priorities. The PR must pay administration costs (attorney and fiduciary fees), funeral expenses, and taxes before distributing assets. See IC 29-1-14-2 for classification of claims (IC 29-1-14-2). The PR uses estate funds—never personal funds—to settle valid debts.
4. Managing Ongoing Bills
During probate, ongoing expenses such as mortgage, utilities, insurance, and maintenance must continue. The PR should:
- Use the estate’s bank account to pay recurring bills.
- Collect any income generated by estate assets (rents, dividends) and apply those funds to expenses.
- Monitor cash flow closely; if cash is low, petition the court for an interim distribution or an advance on estate assets.
5. Selling Assets or Borrowing Against the Estate
If the estate lacks liquid assets, the PR can request court approval to sell property or obtain a short-term loan secured by estate assets. The court will weigh the necessity and best interests of beneficiaries. Keep detailed records of all transactions.
Helpful Hints
- Open a dedicated estate-checking account immediately after appointment.
- Track every expense and income deposit with clear receipts and ledgers.
- Publish and mail creditor notices per IC 29-1-8-1 to limit unknown claims.
- Review Indiana Code Title 29, Article 1, Chapter 14 for payment priorities.
- Maintain property insurance and continue essential services until sale or transfer.
- Consult an estate attorney before selling property or borrowing against estate assets.