Creditor Claims on an Estate
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Who Will Handle Any Claims Made Against My Estate?
If you die, a personal representative will handle any claims made against the estate. A personal representative might be the executor of the estate, a trustee, a beneficiary, or an appointed representative.
What Types of Claims Might Be Brought Against My Estate?
A number of claims, or demands for payment, might be brought against your estate after you die. If your estate has assets to pay these claims, they are generally paid in the following order:
- costs and expenses of administration
- reasonable funeral expenses
- debts and taxes, giving preference to those required by federal law
- reasonable and necessary medical/hospital expenses of the deceased or payment to the people who assisted him/her
- debts and taxes as required by state law
- all other claims that might be brought against the estate.
If the money runs out before a claim is paid, then that person will get nothing. In addition, claims that arise at or after the death of the decedent (the person who died) will not be honored
How Will These Claims be Brought?
The claimant (person seeking an interest in the estate) will normally mail their claim to the estate's representative as well as file the claim in court. This will include an explanation of:
- what the claim is for
- who the claimant is
- when the claim is due, if that date has not already passed.
The claimant may take action in court against the personal representative for collection of the debt. The personal representative must be informed of the claim within a certain period of time or the claimant will be unable to collect. These time limits vary from state to state, and in come cases, the court may order an extension to allow the claimant more time.
What Can the Representative Do With an Invalid Claim?
If you are the personal representative of an estate, you can respond to a claimant with a written notice of disallowance of the claim, and you must normally do so within 60 days of receiving the claim. The claimant may then petition the court to order payment of the claim.
Should I Consult an Estates Lawyer?
If you are the personal representative of an estate, or if you want to ensure that any claims brought against your own estate will be properly settled, it is important that you consult an attorney to help you with the complexities of estate law. An attorney specializing in estate planning will have the experience necessary to ensure that you protect your rights and assess any obligations of your estate.
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Last Modified: 11-02-2012 12:19 PM PDT
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