Creditor Claims Against the Estate

Probate is not an easy process to deal with. Being an executor can be very stressful, as you are dealing with many elements, and many are legal in nature. One thing you might experience is a creditor claim against the estate.

A creditor’s claim is a request made by someone who’s owed money by a deceased person (the decedent) to be paid from that person’s estate. When a loved one dies, their estate must handle valid debts before distributing assets to heirs. Common debts include medical bills, funeral expenses, and credit card balances.

The process starts when the estate’s personal representative or executor publishes or otherwise notifies creditors of the death. Then creditors typically have a fixed deadline to file a formal claim with the court or estate administrator.

If debts exceed the estate’s available assets, state law sets out an order of priority for payment: funeral costs, administration expenses, taxes, and then other claims. Some heirs may receive reduced inheritances or none at all if the estate is insolvent.

How to Respond to a Creditor’s Claim

As the personal representative of an estate, it is important to handle creditor claims promptly and correctly. Here is what you need to know:

• Review the claim: Carefully examine the creditor’s submission. Make sure it includes essential details such as the creditor’s name, the amount owed, the basis for the claim, and any supporting documentation. Confirm that the claim is legitimate and directly related to the decedent’s estate.
• Check the statute of limitations: Determine whether the claim falls within the legal time limit for filing. If the claim is past the statute of limitations, you may not be required to pay it. In Florida, the statute of limitations for creditor claims against an estate is three months after the first publication of the Notice to Creditors, or 30 days after the creditor receives direct service of the notice, whichever is later. For creditors who do not receive direct notice, there is a two-year deadline from the date of the decedent’s death. Consult an attorney to understand the rules.
• Accept or reject the claim: After reviewing the claim, decide whether to approve or deny it. If the claim is valid and the estate has sufficient funds, you can approve it and arrange payment. If the claim is invalid or lacks evidence, you can reject it, providing a clear written explanation.
• Notify the creditor: Communicate your decision in writing. Include a detailed explanation and any supporting evidence, and make sure to send it within the required time frame.
• Resolve disputes: If the creditor disagrees with your decision, you may need to negotiate further. A lawyer can help determine the best approach.
• Keep thorough records: Maintain detailed records of all communications, decisions, and documentation related to the claim. These records are essential for transparency, accountability, and any potential legal proceedings.

Seek Legal Help

Creditor claims can be tricky to handle. Sometimes they are legit, but sometimes they are not.

Fort Lauderdale probate litigation lawyer Edward J. Jennings, P.A can assess your case and advise you on how to move forward. Fill out the online form or call 954-764-4330 to schedule a consultation.

Source:

trustandwill.com/learn/creditors-claim