As a general rule, Personal Representatives in a probate administration are not liable for the debts of the estate. If they were, no one would be willing to serve for risk that the estate couldn’t cover all the bills. But, like many things in the law, there is an exception.

There is a risk of liability for Personal Representatives in a probate when the estate is insolvent or partially insolvent and the bills are not paid in the correct order. When the assets of the estate are not sufficient to cover all the creditors’ claims that have been allowed, there is a priority amongst creditors for who gets paid and how much. If the Personal Representative pays a creditor that is lower on the payment totem-pole, then a creditor higher on the totem-pole that did not get paid can sue the Personal Representative for the amount that the creditor would have gotten had the PR not paid the other creditor.

Personal Representatives for estates that may be insolvent need to act with caution from the start when it comes to paying creditors – you may not know until the end whether the estate really is insolvent, and by then it may be too late. That’s one of the reasons why it is important to work with an experienced probate attorney who can advise you of which bills to pay when, and how much.

In the majority of cases, the costs of administration (including the costs of the attorneys fees) are paid by the estate as a priority creditor, even in an insolvent estate, and we easily identify the few cases where the costs of administration are not paid by the estate on the front end, so there’s really no risk in working with an experienced attorney to help you.

If you have a probate case and want to make sure that you don’t have any liability as personal representative, call us at (612) 206-3701 or fill out our contact form today to schedule a probate administration consultation.