Creditor Claims Against the Estate
Most people die with some debt. While an Executor has an obligation to address properly filed creditor claims, the Creditor must act sooner rather than later. A delay might mean the beneficiaries have already spent the estate’s funds leaving your claim essentially worthless. The below article describes creditor options to make claims against an estate.
Creditor Claims: What Does This Mean for a Beneficiary to an Estate?
A creditor must file a claim against an estate within a specified period, or the claim is forever barred. Therefore, if a decedent owes you money, you must pursue that claim. Payment of debts is made before payment of inheritances, reducing the estate’s total value.
Time Frames for Creditors to Make a Claim Against an Estate.
Each state limits the time for creditor claims. For example, Pennsylvania law provides that creditors have one year after the date of death to make a proper claim against the estate. A time limit exists so an executor can eventually distribute inheritances, free from the potential of later claims by unknown creditors
The Duty of the Personal Representative to Notify Creditors.
The Executor or Personal Representative is responsible for addressing properly filed creditor claims. Each state has rules covering what steps must be taken. If followed, the Executor is released from liability. If the Executor fails to follow proper steps, the creditor might have a claim against the Executor’s assets.
Advice for the Fiduciary
The most experienced professional fiduciaries hire experienced Estate Planning Attorneys to advise them. Hiring an advisor is excellent advice because as a fiduciary, you have the legal right to retain an experienced Estate Planning Lawyer to assist and advise you. There is no personal cost to you. The estate or trust pays the fee because obtaining advice when the chance for personal liability exists is a reasonable expense. Going without sound advice provided at no personal cost is foolish.
Fiduciaries should not use estate or trust assets for personal gain. Your decisions need be free of conflict and self-dealing. Sometimes the lines of what is your personal gain and what is best for the beneficiary are gray. When the lines are unclear, seek the advice of a seasoned Estate Planning Lawyer. Your lawyer can be a sounding board (at no cost to you) to help ensure your actions do not create personal liability.
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If you have any questions about creditor’s claims or any other estate law topics, please contact us to schedule a free consultation.
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For more than two decades Klenk Law has focused only on Estate Law. We’ve seen it all, and this experience allows us to explain complex estate law and creditor’s claims against the estate clearly and concisely. If you are an Executor or Personal Representative our experienced Estate Attorneys will make it easy for you to understand creditors claims and provide advice so you can make the best decisions.
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