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, as defined by statute, 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, Washington law provides that creditors must be presented within the later of: (1) Thirty days after the personal representative served or mailed the notice to the creditor as provided under RCW 11.40.020(1)(c); or (2) four months after the date of first publication of the notice 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 and rejecting improper claims against the estate. 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 personally.
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 as the fiduciary. 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 and Trust Administration Lawyer. Your lawyer can be a sounding board (at no cost to you) to help ensure your actions do not create personal liability.
Experienced, With Reasonable Prices, We Will Fight For You
We can help. If you have any questions about creditor’s claims or any other estate law topics, please contact us to schedule a free consultation.