Pub. 15 2020-21 Issue 6

WWW.NEBANKERS.ORG 14 COUNSELOR’S CORNER — continued from page 13 1. Appointment of a “Special Administrator” Nebraska courts can appoint a special administrator in many circumstances, including where the personal representative has a conflict of interest, such as when the PR or a family member benefited from non-probate property that is now needed to pay creditors. The creditor can ask the court to appoint someone to take up the job of collecting non-probate or fraudulently trans- ferred property or where the court otherwise finds it necessary to preserve the estate. (Neb. Rev. Stat. §30-2507(2)). The special administrator — sometimes but not always a lawyer — can be compensated from estate assets. A special administrator can also pursue claims against the personal representative if that person has breached their fiduciary duty to the estate. Neb. Rev. Stat. 30-2474 may make the PR personally liable for those acts. 2. Replacement of the PR. In situations where the PR is not acting responsibly, the Nebraska statutes permit an interested party to ask the court to replace the PR with someone else upon a showing of sufficient cause. Neb. Rev. Stat. §30-2454 allows interested parties — which would include creditors — to petition the court to remove a PR. Grounds for removal include, broadly, the “best interests of the estate” or if the PR misrepresented material facts in the proceedings or has mismanaged the estate. The court can ap- point a successor PR, which could be a family member or an unrelated third party. F. Priority for Payment of Claims Creditors should be aware of the priority for payment of claims from the estate. Creditors with unsecured claims do not have first priority as to funds in the estate. Generally, the priority order for payment of claims is as follows: (1) Estate administration costs; (2) Reasonable funeral expenses; (3) Debts and taxes with preference under federal law; (4) Reasonable and necessary medical and hospital ex- penses of the last illness; (5) Debts and taxes with preference under Nebraska law; and (6) All other claims. Most unsecured claims will fall under (6). However, creditors who have secured collateral can proceed against the property outside of the probate proceedings, for ex- ample, by way of foreclosure proceedings. CONCLUSION When lenders believe that their claims against a dece- dent are in doubt due to the estate’s potential insolvency, they should step up their activity to learn more about the estate left by the decedent. It may be advisable to retain counsel to fight to gather and liquidate assets to bolster the estate for creditors.  Single Source is your 1 Partner, 1 Solution, 1 Source for architecture, construction, and furnishing of community banks . We are a proven leader in building design and construction across the upper Midwest. Call Jim today for a free consultation on your project! 319-232-6554 112 W. Park Lane Waterloo, IA 50701 www.Single.Source.Net 1 Integrated team serves all your needs, so you benefit from: Fast Delivery Better Quality Cost Savings Singular Responsibility Reduced Change Orders Reduced Risk 1 Source, Full Service Architecture Construction Interior Design Master Planning Site Development Spacial Planning Budgeting Project Administration Project Management Budgeting Value Added Engineering Randy Wright and Jesse Sitz, Partners, Baird Holm, LLP