You Were Named Executor. The Credit Card Bills Can Wait.

A woman in Indiana County loses her mother in March. The will names her executor, and she wants to do right by Mom. Within two weeks she has paid off the credit cards from her own savings, handed her brother the keys to the truck, and started splitting the checking account three ways. Every one of those moves came from a good place. Every one of them could come back to bite her.

Being named executor is an honor. It is also a job with rules, and most people learn those rules after they have broken a few. Here are the three mistakes we see most often.

Mistake One: Acting Before You Are Allowed To

The will names you executor, but the will alone does not let you do anything. You first have to probate the will with the Register of Wills in the county where the person lived. Here, that office sits inside the Indiana County Courthouse. Once the Register accepts the will, it issues letters testamentary, the document that proves to banks, insurers, and PennDOT that you speak for the estate.

Until you have letters, you cannot sign for the estate, close accounts, or sell anything. Once you have them, open a separate estate checking account and run every dollar through it. Mixing estate money with your own is the fastest way to turn a simple accounting into a family argument.

Mistake Two: Paying the Bills Too Fast, or From Your Own Pocket

Grief makes people want to tidy up, so they pay every bill the day it arrives. Resist that.

First, the debts belong to the estate, not to you. Serving as executor does not make you personally responsible for your mother's credit cards. Paying them from your own savings is a very generous gift to a bank that did not send flowers.

Second, Pennsylvania sets a priority order for claims against an estate. The costs of administering the estate and the funeral come ahead of ordinary debts like credit cards. If money is tight and you pay a low-priority creditor first, you can be held personally responsible when a higher-priority claim goes unpaid.

Mistake Three: Handing Out the Inheritance Too Soon

Your brother wants the truck. Your sister wants her share of the savings.

Pennsylvania gives creditors time to come forward. After you receive letters, you must advertise the estate once a week for three successive weeks in a local newspaper and in the county legal journal (20 Pa.C.S. § 3162). The law protects an executor from unknown creditors only after one year has passed from that first complete advertisement (20 Pa.C.S. § 3532). Distribute before then and a creditor who surfaces in month ten becomes your problem.

Taxes add another clock. Pennsylvania inheritance tax becomes delinquent nine months after death, and paying within three months earns a 5 percent discount. You need estate cash on hand to capture it.

The Short Version

• Probate the will and get letters before you act.

• Open an estate account and never mix estate money with your own.

• Advertise the estate and, within three months of receiving letters, send the written notices to beneficiaries that Orphans' Court Rule 10.5 requires.

• Hold distributions until the creditor period and the tax picture are clear.

You Do Not Have to Do This Alone

The attorneys at Ludwig, Everett & Tomb help Indiana County families probate wills, deal with creditors, file inheritance tax returns, and close estates without the surprises. Call us at (724) 349-3908 or (724) 471-8075 before you write that first check.