Age Gracefully With A Plan In Place

3 steps for handling debts during Indiana probate proceedings

On Behalf of | Feb 4, 2024 | Trust & Probate Administration |

Proper estate administration requires adherence to testamentary documents and state law. The personal representative overseeing the probate process must file tax returns and pay someone’s debts during the probate proceedings.

Carefully following probate rules is very important during that process, as representatives can sometimes become personally responsible for debts if they do not handle estate obligations appropriately. What steps does someone typically need to take to avoid personal liability for the debts of an Indiana estate?

Find and disclose key records to the court

A personal representative typically needs to submit the financial records of the decedent to the courts. They may need to create an inventory of assets and a list of known financial obligations. They must also submit the will or other testamentary paperwork to the courts for review.

Send and publish formal notice

Once a personal representative has begun the probate process, they must notify creditors about the proceedings. Typically, someone should send formal written notice to known creditors. They also need to publish notice for unknown creditors. They need to then wait until all creditors have had their statutory opportunity to file their claims in probate court before distributing the assets from the estate to beneficiaries.

Pay debts in the order of priority

Especially when an estate does not have enough resources to pay all of someone’s debts, a personal representative must be careful to pay them in the right order in accordance with Indiana state law. Small mistakes can lead to major financial liability.

People may require guidance while administering an estate. Securing this kind of support can reduce the risk of a mistake that triggers personal financial liability.