From our “Ask a Question” mailbag: I am the administrator of my brother’s estate in Bucks County, Pennsylvania. I have advertised the estate and paid all the valid creditors, but a neighbor of my brother has made a claim for $50,000 that I believe has no validity. Can I distribute the estate funds without paying him?
The quick answer is yes, but the right answer is that you should not.
As the executor, you are free to make “at risk” distributions. An “at risk” distribution is that may put your personal assets at risk. Your Bucks County Estate Administration Lawyer works hard to keep you out of trouble. If you ignore your brother’s neighbor, you could be putting yourself at risk. Pennsylvania is a rather creditor-friendly state. If you—as administrator—know of a creditor’s claim made within a one-year period after properly advertising the estate, then you are expected to address the claim. If you do not, and if you distribute all the assets, the creditor can Petition to make you Account for your actions as administrator and explain why they was not paid.
Even if you convince the judge that the claim is invalid, since there are no estate funds left, the cost of assembling and defending your accounting may come out of your own pocket. Worse, if the judge finds the claim valid, you could be paying for all the court time plus paying the $50,000 claim yourself.
The wiser alternative is to have an attorney experienced in Orphans’ Court litigation to file a Formal Account with the Bucks County Orphans’ Court on your behalf prior to making any distributions. In this accounting (paid for out of estate funds) your attorney will explain that there is a claim and you question its validity. You will then have a hearing where the judge will listen to both sides and make a ruling. If you follow the ruling, then you are protected.