Part III
The estate's money
The ledger, how assets and debts are recorded, paying debts in the right order, solvency versus liquidity, the balance sheet, and locking the inventory.
The ledger, and why it matters
The ledger is the estate's financial source of truth. It tracks what the estate owns and what it owes, and continuously answers one question: is there enough to cover the debts?
This is the part of Heirwise most directly tied to your personal exposure. An executor who distributes to heirs while the estate still owes money can be held personally responsible for the shortfall. The ledger exists to stop you doing that by accident.
Everything in the ledger arrives one of two ways: extracted from a document you uploaded, or entered by hand. Both are equal — a manually-entered asset counts exactly the same in every calculation.
Three kinds of entry
| Kind | What it covers |
|---|---|
| Assets | What the estate owns — accounts, property, vehicles, directly-held shares, money owed to the decedent. |
| Liabilities | What the decedent owed at death — cards, mortgage, medical bills, taxes. |
| Expenses | Costs of administering the estate itself, incurred after death — attorney fees, filing fees, appraisals, upkeep on property awaiting sale. |
The liability/expense split affects how costs are grouped and totalled — it does not set payment order. Payment order comes from a separate priority class you assign to each entry. Recording an attorney invoice as an expense does not by itself put it first in the queue.
The ledger recalculates as you go. Add a debt and the solvency figure moves immediately; that's the point. It also means totals are only as good as what you've entered — an estate can look comfortably solvent right up until you upload the last bill.
Assets: ownership, probate status, and liquidity
An asset is more than a name and a number. Three properties determine how it actually affects the estate.
Ownership percentage
The estate may own only part of something. A jointly-held account or a house owned with a sibling belongs to the estate only in proportion. Heirwise stores the percentage and applies it when totalling every asset, sold or not, so a half-owned property doesn't inflate the estate by its full market value.
Once an asset is sold, record the sale proceeds: what the closing statement says the sellers received, which is the whole property's sale price less selling costs and any mortgage or lien paid off at closing. Then mark that mortgage paid. If the estate owned only part of the property, enter the proceeds for the whole property anyway. Heirwise applies the ownership percentage and shows the estate's share as you type.
Probate versus non-probate
This is the distinction that surprises most first-time executors. Not everything the decedent owned passes through probate. Assets with a named beneficiary or a survivorship right transfer directly to that person and never become part of the estate you're administering.
| Typically non-probate | Why |
|---|---|
| Life insurance with a named beneficiary | Pays directly to the beneficiary under the policy contract. |
| Retirement accounts with a named beneficiary | Passes by beneficiary designation, outside the will. |
| Property held joint with right of survivorship | Vests in the surviving owner at the moment of death. |
| Payable-on-death and transfer-on-death accounts | The designation controls, not the will. |
You must mark these yourself. Every asset is treated as part of the probate estate until you say otherwise — Heirwise does not infer it from the document type or from how title was held. A life insurance policy read from an uploaded document counts toward the probate totals, and toward solvency, until you change its probate status by hand.
This is worth a deliberate pass through your asset list. An estate that includes a large policy or a survivorship property in its probate totals can look considerably wealthier than the estate you are actually administering — which distorts solvency, and therefore the gate that controls when you may distribute.
Once marked, non-probate assets stay on file — you want them recorded, and they can matter for inheritance tax even when they're outside probate — but they come out of the probate totals that drive solvency and distribution. The balance sheet shows probate and non-probate figures separately so you can see both.
Whether a particular asset is really outside the probate estate can be a genuinely legal question — a stale beneficiary designation, an ambiguous deed, a divorce that should have removed someone. If the answer changes the solvency picture, get it confirmed rather than deciding yourself.
Liquidation status
You mark where each asset stands on the road to being distributable. This is what lets Heirwise tell the difference between an estate that's wealthy and an estate that can actually pay its bills.
- Not liquid
- Owned, not cash, nothing in motion. A house nobody has listed yet.
- Pending sale
- Being converted to cash but not yet closed. Under agreement, at auction, mid-transfer.
- Liquidated
- Sold and converted to cash. Available to pay debts and fund distributions.
- Retain in-kind
- Not being sold — going to a beneficiary in its original form. The car goes to the daughter as the car.
One of the Phase 3 checks requires every probate asset to be either liquidated or retained in-kind. Assets still marked not liquid or pending sale will block it — those two statuses mean the outcome isn't settled yet.
Liabilities and expenses
Each debt and expense carries an amount, a type, a payment status, and a priority class — the last of which determines when it gets paid relative to everything else, and is covered in the next section.
Payment status
- Unpaid
- Owed, nothing done yet.
- Pending approval
- You've reviewed it and it's queued for payment, but the money hasn't moved.
- Disputed
- You don't accept the claim as valid, or not at that amount. Genuinely contested claims are attorney territory.
- Paid
- Settled and done.
A Phase 3 check requires every active liability to be marked paid. Anything left in unpaid, pending approval, or disputed will hold that check open — including a disputed claim, which is intentional: an unresolved dispute is a reason not to close an estate.
Deleting versus marking paid
These are different actions with different meanings. Marking a debt paid records that the estate discharged it — the obligation existed and was settled. Deleting says it should never have been recorded, usually a duplicate or a debt that turned out not to be the estate's.
Deleted entries are removed from every total rather than being destroyed, and deleting one can move the solvency picture — sometimes in the direction you didn't expect.
Check the balance sheet after any deletion. Heirwise will not warn you that a deletion changed the estate's solvency, so a deletion that quietly tips the estate one way or the other is yours to notice.
Resist the urge to delete a debt you've paid. The record of what the estate owed and settled is exactly what you want if anyone questions your administration later.
Paying debts in the right order
If the estate can pay everything it owes, order matters much less. When it cannot, Pennsylvania law fixes the sequence in which claims get paid — and you do not get to choose. Claims fall into ranked classes, and every claim in a higher class is satisfied before anything in a lower one.
This is one of the places an executor can become personally liable. Paying a lower-ranked creditor ahead of a higher-ranked one can leave you answerable for the difference out of your own money, even if you acted in good faith.
What Heirwise does with it
Each liability and expense carries a priority class that you assign. The priority worksheet then groups your debts by class and presents them in statutory sequence, so you can work down the list settling each one and marking it paid.
Set the class as you enter each debt. It defaults to the lowest one, so a funeral bill or an attorney's invoice recorded quickly and left alone will sort below the ordinary creditors — and the worksheet you are relying on to pay in the correct order will be quietly wrong.
Where to find the order itself
This guide does not reproduce the ranking, and that is deliberate. The sequence is a matter of statute rather than a Heirwise feature, the classes carry eligibility conditions and statutory limits that a summary would flatten, and deciding which class a particular debt belongs in is a legal judgment rather than a data-entry choice.
Read it at the source instead. The order of payment is set by Pennsylvania's Probate, Estates and Fiduciaries Code at 20 Pa.C.S. § 3392. Your county's Register of Wills can point you to it, and any Pennsylvania estates attorney will know it well.
If the estate cannot pay everyone in full, stop and get an attorney before paying anyone. Applying the statutory order to a real shortfall — partial payments, disputed claims, competing claims inside one class — is legal work, and it is exactly the situation the order exists to govern.
Secured debts sit outside this
A mortgage is not really competing in this queue. The lender has a claim against specific property, so the debt is generally satisfied out of that asset rather than out of the general estate. Heirwise records it as a liability, but do not reason about it as though it were an unsecured card balance.
Solvency and liquidity
Two different questions that people routinely conflate, and Heirwise tracks them separately because an estate can pass one and fail the other.
| Question | What it asks |
|---|---|
| Solvency | Is the estate worth more than it still owes? Probate assets measured against liabilities and expenses that aren't yet marked paid. |
| Liquidity | Can the estate pay its bills right now? How much of that value is actually cash rather than tied up in property. |
A house-rich, cash-poor estate is the classic case: comfortably solvent on paper, unable to pay the funeral bill until the house sells. Recognizing that early changes what you do — you may need to sell something sooner, or in a different order, than you'd planned.
The solvency gate
Heirwise checks solvency before letting you move into distribution — but solvency alone isn't enough. Three conditions all have to hold: the estate is solvent, the creditor period has been recorded and has elapsed, and every administration cost and family exemption claim is marked paid. Until all three are true, distribution stays locked.
The lock is a feature, not an obstacle. Paying heirs out of an insolvent estate is the single most common way executors incur personal liability. If you believe the lock is wrong, the fix is to correct the ledger — not to work around the gate.
Solvency is recalculated continuously, which means it can regress. An estate that qualified for Phase 3 can fall back out if a new liability turns up afterward. Rather than hide that, Heirwise re-evaluates the same conditions inside Phase 3 — a late-arriving medical bill is exactly the kind of thing you need to know about before you distribute.
The solvency banner on the balance sheet is the fastest read on whether the estate is solvent, and by how much it falls short if it isn't. It will not tell you about the other two conditions, though — for those, work through the Phase 3 checklist, which evaluates each condition separately and is the reliable place to see which one is holding you up.
The Estate Balance Sheet
The balance sheet is the consolidated financial view: probate assets, non-probate assets, liabilities, expenses, the net position, the solvency banner, the creditor period, and the distribution plan section, all on one page.
There is only one balance sheet, but several ways in. You'll reach the same page from the inventory Summary tab, your dashboard, the Phase 2 screen, the Phase 3 snapshot card, and the priority worksheet. If it looks familiar, that's why.
The totals are computed on the server rather than added up in your browser, which is what makes them consistent everywhere — the figure on the balance sheet, the figure Elin quotes, and the figure in the exported workbook all come from the same calculation and reconcile exactly.
Read the balance sheet after every batch of uploads. It's the quickest way to notice that something didn't get recorded, or got recorded twice.
Locking the inventory
At a certain point you need the numbers to hold still. Locking the inventory freezes the asset and liability records so the figures backing a filing or a plan can't drift out from under it.
While locked, you can't add new assets or liabilities, and edits to existing ones are refused — though be aware the edit fields still look editable, so you'll discover the lock by getting an error rather than by the field being greyed out. The lock records who set it and when, and it can be unlocked if something genuinely needs to change — it's a guard against accidental edits, not a one-way door.
Two things to expect: you can't lock an inventory that holds no probate assets — a life insurance policy or joint account with a named beneficiary passes outside the estate and doesn't count — and you can't delete an asset that already has beneficiary distributions assigned; clear those first.
The distribution plan has its own separate lock, which behaves a little differently: it's set as part of generating the Final Distribution Schedule, so the PDF and the locked plan are always created together and can't disagree.
Locking and unlocking are both recorded in the estate's history with the actor and the timestamp. Locking twice doesn't create a second record or move the original timestamp.