Settling debts for an estate

[Greg_Georgia]

I am the executor for my mother-in-laws estate (in Probate in Georgia). She had one vehicle in her name (financed) and half ownership (with her spouse) of a mobile home that was mortgages. Her husband filed for and was granted a Years Support for the mobile home and the vehicle - to which her 3 adult children had no opposition - since there wasn't any equity is either.

The estate has several debts such as loans from the 3 children for burial costs, 5 or so medical bills not paid by insurance, and attorney fees for assisting with probate, etc (almost $15K total). My question is if there is any money that comes into the estate - such as a small asbestos settlement from her former employer or a lump sump settlement from a injury case that is currently in appeals court - what method is used to determine who gets paid first? Or is a percentage paid out across all debts whenever money is received into the estate? The estate currently has no money whatsoever and her spouse is moving on with his life and doesn't communicate with me.

There is a will that leaves everything to her husband and the 3 adult children.

[Mr. Knowitall]

Notify the creditors of the estate and see if they make claims. Some may not. Normally when money comes in you would propose a distribution. Normally that would mean paying off any secured creditors, paying off unsecured creditors on a pro rata basis from any money left over (if any), then distributing any remaining funds (if any) to the heirs. The court would approve the distribution, and the creditors would have notice of the proposed distribution and opportunity to object. You can probably get the court clerk to verify the proper procedure, although they won't provide legal advice.

[lwpat]

Mr. K is correct. Check with the clerk at the probate court. The state has a schedule as to who gets paid first. As you can imagine, it is usually the attorney and funeral home that get theirs first.

[Greg_Georgia]

If or when any money comes into the estate before I close it next year, would moneys be distributed during that time or accumulated and only distributed at the close of the estate? There may be an asbestos settlement check that might come through while the estate is open and after that time I would assume that we would notify them to continue paying the heirs directly. The other is a court case that may award money to the estate that would hopefully covers most if not all of its debts.

So, bottom line is - are monies held until before the estate is closed or when received?

I had an attorney assist in the initial probate but he hasn't been involved in these details as I end up having to pay him out of my pocket.

[Mr. Knowitall]

If the court is supervising the estate, the court will review and approve any proposed distributions. Consider paying your lawyer from the estate instead of your own money as (a) it sounds like he's not much help and (b) that will give him an incentive to work on the estate.

[Greg_Georgia]

The problem with paying an attorney from the estate is that the estate has no money and no assets, thus any future payments to the attorney would be out of my pocket as previous payments. Any interest in property she had was granted to her spouse in a Year's Support motion. The court isn't supervisoring the estate or any distributions. At this point there is nothing to distribute. The estate is in debt to the tune of about $15K. There could be some small settlement checks from an asbestos settlement ($1k or less). After filing the taxes next year I plan to close the estate. I was wondering if any money that comes in should be held until the estate is about to be closed, or distributed prorata to creditors (none are secured - just medical and unsecured loans to the estate for burial expenses).