Klenk Law

What are the consequences of making an at risk distribution?

Posted on Mon Jun 29, 2015, on Chester

From our “Ask a Question” mailbag: I am the executor of my Mother’s estate in Chester County, Pennsylvania. I have advertised the estate and paid all the valid creditors, but a neighbor of my mother has made a claim for a five-figure sum of money that has no validity. Can I make distribution without paying him?

The quick answer is yes, but the right answer is that you should not.

As the executor, you are free to make “at risk” distributions, meaning a distribution that may put you personally at risk. Any experienced Chester County probate lawyer should advise you that ignoring your mother’s neighbor could put yourself at risk. Remember, even when your attorney’s asking you to slow down or take a few extra steps, they’re trying to prevent you from causing yourself more problems later on. You might be motivated to close out your duties quickly, but that neighbor could make some major hassles for you—even if their claim’s not valid.

To begin with, Pennsylvania is a rather creditor-friendly state. If the executor knows of a creditor’s claim made within the one-year period after properly advertising the estate, the executor must address that claim. If you do not, and if you distribute all the assets, the creditor can petition to force you to account and explain why he was not paid.

Even if you convince the judge that the claim is invalid, you will still have to pay for your time in court. As you have already distributed all the funds, those costs will likely come out of your own pocket. Worse, if the judge finds the claim valid, you could be paying for all the court time plus paying the cash claim yourself.

Instead, you are free to have an attorney experienced in Orphans’ Court litigation file a Formal Account with the Chester County Orphans’ Court. In this accounting your attorney will explain that there is a claim and you question its validity. You will then have a hearing where the judge will listen to both sides and make a ruling. If you follow the ruling, then you (and your personal property) are protected.

If you have questions about Chester County Estate Litigation, feel free to contact our office for a free consultation.

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