In our last post, we discussed the process of “probate” and what the Personal Representative or Executor must do to begin the process. This week, we will look at some of the loose ends that need to be tied up after Personal Representative is appointed through the probate process.
First, ensure that the Social Security Administration has been notified of the death. The funeral home usually takes care reporting the death, but the Personal Representative should double-check to avoid having to return funds to the Social Security Administration.
Second, all automatic payments and debits from a decedent’s account need to be reviewed and, in most cases, stopped. If you have access to the decedent’s recent bank statement or credit card statement, it is easy to spot these payments and debits. These payments may include an EZPass account, utility payments, car payments, rent payments, credit card payments, student loan payments and mortgage payments. Remember, for banks to speak with a Personal Representative and allow him or her to make changes to an account, the Personal Representative must provide them with a death certificate and Letters of Administration (or Letters Testamentary).
Third, if the decedent was the only person at his or her residence, have the cable and telephone service cancelled. Keep all e-mail accounts open, if possible, to receive any notices or statements the decedent agreed to receive electronically. The electric, gas, and water bills should be retitled in the name of the Estate until the property is sold or transferred to a beneficiary. You may have to provide a death certificate and Letters of Administration to these companies as well.
If the decedent was not the only person at the residence, the other resident(s) must take over payment of the household bills, including utilities. The decedent’s name should be removed from all accounts.
You might be wondering how to address a mortgage or rent payment. The method depends on whether the mortgage or lease was in the decedent’s name alone, or there is someone else who is also responsible for those payment obligations. If there was a co-mortgagor or co-lessee, that person becomes solely responsible for all payments after the decedent’s death. If the decedent was the only person responsible, the Estate steps into the shoes of the decedent and becomes responsible for payment.
Lastly, remember that in Maryland the Personal Representative should not pay any debts of the decedent until the six (6) month statutory creditor period has passed. If the Estate ends up being insolvent (not enough assets to cover the debts of the decedent and the expenses of the Estate) a statute tells the Personal Representative in what order to pay the debts. If the Personal Representative does not follow the correct priority of payments, he or she could be personally liable to the unpaid creditors of higher priority over the paid creditors of lower priority.
Our next post will address debts of the decedent, the creditor period and priority of payment.