By Alexis Levitt, Esq.
This is a very common scenario: Someone dies, no one can get into their bank accounts, and yet there are bills to be paid. That includes home utilities, real estate taxes, medical bills, the probate attorney’s retainer, and more.
Usually, there is someone in the family who will front the money. Later on, after probate is opened and the personal representative (executor) has access to the bank accounts, they can pay that person back.
If you are the person who will be loaning money to the estate, first, be confident that there will be sufficient estate assets to repay you.
If you don’t think that the estate will be able to repay you in full, then consider which bills to pay and which to ignore, at least for now.
Which creditors are typically willing to wait until a house is sold? (Real estate taxes.)
Which creditors will later ask for only pennies on the dollar? (Credit cards.)
Which bills must be kept current? (Homeowners’ insurance, home utilities.)
If you are loaning money to the estate, keep very precise records: the date, amount, and check number. You will need this information later on to create the court report that is required to close the estate (“account”), as well as to satisfy questions from any heirs.
If you are confident that the estate will have the funds to repay you, and if you keep good records of your loans, then fronting money to an estate should not be a problem and will provide relief to all family members.