How does the executor pay off debts and final expenses if all accounts have beneficiaries names?

I was advised to do exactly as CarolLynn described. I am POA for my mom, so although most accounts have a POD listed, I keep one savings account with enough to pay funeral expenses, inheritance taxes and other debts without a POA. I have been advised that in my state, if there is less than $100,000 of "undesignated" funds at the time of death, we can do an informal probate (which is very inexpensive relative to a full, formal probate). This way, there will be money available without the need to collect part of it from my uncooperative brother.

Probably the only expense that you would want to be concerned with would be her funeral expenses. You don't want to bear the whole burden financially of that but the rest…she will be gone.

I would talk to an attorney and make sure you do it right. You don't say what state you are in, if you are POA, what other funds if any are available to pay bills and what bills you mean. If there are joint accounts, though, those can be cleared out by either party at any time. A joint account carries more weight than a will. A will is for REAL property, such as a house. Then there are family dynamics to deal with. Only a lawyer in your state/your mother's state can tell you exactly what you need to do. Could turn out it's all good.

theresa - you are asking this question from the perspective of an executor of your mom's will. This doesn't take effect until her passing as I'm sure you know.

The question I would put to you is: are you currently the DPOA? If you are, you have the authority to move your moms money around, close old accounts, open new accounts, etc.

So, are you concerned about paying her bills after death, or NOT paying her bills after death?

If you are currently her DPOA and DON'T WANT to pay her creditors, leave the accounts as they are. Some folks, with legal or banking advice, have intentionally set up accounts this way to avoid probate and creditors.

If you WANT to pay her expenses at the end, you can open accounts that are not POD so that you DO have funds available to pay her debts and final expenses. These accounts can be opened with a joint owner , such as yourself, thus avoiding probate, but knowing that YOU as the executor or would distribute any remaining funds to the beneficiaries according to the terms of the will.

You state that you expect to be the executor of an estate and there are insufficient funds to pay all creditors because there are beneficiaries listed on the accounts, hence the accounts are not subject to probate.
What happened in your case is actually the result of proper planning. By designating beneficiaries of each account, they avoid probate.
However, if you act as executor, you will have a personal responsibility to administer the estate properly. That is to say, if it is not done correctly, then you must pay from your personal funds. Therefore it might be a good idea to either get insurance, or retain an attorney who is licensed and insured.
Legal fees and expenses of administration are first priority claim, so it is paid before all others. In Pennsylvania, my state, the priority of claims is set forth in Section 3392 of Title 20 of our laws. Section 3162 of the Code provides that the executor must advertise the grant of letters and notify creditors to bring claims within one year. Also, although the accounts with beneficiaries passed outside probate, there may be Inheritance taxes due on them. It depends upon the state laws where you live. There may also be Medicaid claims due against the estate. As you can see, it can get complicated, but only for someone who has not done it many times before. I hope this information helps.

CrowMagnum: Good to hear from you. It's been awhile. Sorry to hear of your mother's death in October..
Theresa2: I have a pet peeve in this area of beneficiaries. They should be paid first. Most lawyers will not agree with me, but my lawyer does! POD in the Beneficiary Statements is helpful along with each beneficiary's name, S. S. number, and full address. No need for a birthdate, unless requested.
Here we go again: Trot on down to the Courthouse with the deceased last bills. The clerk will prepare a Notice to Debtors and Creditors. If a creditor does not respond within 90-120 days, then do not pay the bill!

My goal is to have my estate insolvent on the day of my death..

I read the original post again and noticed the POD this time, so probate is not necessary. That will save some money and time. No estate account will be needed. In a circumstance like this, does anyone know if the creditors are out of luck if the beneficiaries choose not to honor the debt?

I'm afraid that if your mother's accounts are POD, payable on death, with the siblings listed as equal beneficiaries, then the money may go straight to the siblings without going through probate. Is anyone listed as co-owner with right of survivorship on any of those accounts? I ask this because, my mother died back in October and years before she made me joint owner of her various accounts with right of survivorship. Those accounts did not go through probate.

The easiest way is to set up an estate account and pool all of the money from the various resources. Creditors will be paid from this account. After the probate period and the probate costs paid, money can be divided among beneficiaries. The only bad part about doing it this way is that probate expenses have to be paid.

Setting up an estate account is simple. First you have to apply for an EIN for the estate. You can do this online. It is like getting a SSN. Then go to the bank with your letters testamentary and the death certificate and set up the account. Transfer the money into the account.

There is one thing to consider -- If any accounts have another name on it, and if so are the accounts payable on death (POD). If someone else has a name on an account, they can write checks or draw money from it without going through probate, BUT there can be tax implications. Ask the attorney who is handling your probate what would be the best way to handle these types of accounts to avoid tax problems. (I don't know the answer myself.)

You go through probate. Get a lawyer to help you, there are many pitfalls.