Probate – Notice to Creditors – Part 1
By: Barry E. Haimo, Esq.
March 3, 2014
Probate (also referred to as “estate administration”) is something you generally want to avoid. However, there are circumstances where probate does offer some advantages. This post focuses on one of those advantages which relates to creditors. To fully appreciate this post, please familiarize yourself with an explanation of the probate process and understanding of what creditors are via the links below:
Probate – [Video] http://www.youtube.com/watch?v=zZyp1LIpv5k&list=TLkYVnUSxrYRADxJZxMcuyYOhgRyE4PpAh
Creditors – https://www.haimolaw.com/whats-a-creditor
By now you should understand what a creditor is and why it’s important to minimize your exposure to them if not avoiding them altogether. Probate involves postmortem resolution of creditors’ claims while the personal representative conducts a final accounting and wraps up the deceased’s affairs. It is common for hospitals and physicians to have claims relating to final health expenses. It is more common for credit card companies to timely send their condolence letters asking for money. In either case, if a person or entity is owed money from a recently departed person, they want to collect. Sometimes avoiding probate widens their window of opportunity to file a claim; mainly they are limited by the statute of limitations relating to their claim. In probate, however, the personal representative publishes a notice to unknown creditors in local papers. This serves to give creditors of the deceased a significantly shortened timetable to file their claim before it becomes barred. Notice must also be delivered directly to known creditors of the deceased. The personal representative has a duty to locate reasonably identifiable creditors. Therefore, “willful blindness” is no excuse for failing to serve creditors with proper notice.
Once notified either by direct service of notice or by publication, a creditor has the burden of filing a claim and proving their claim in court before the personal representative will be able to pay the creditor what they are due. This is important because far too often people pay creditors before the probate is initiated. That is in the creditors’ best interests, not yours. Therefore, my advice is simple: when a loved one or friend passes away, grieve. Then call your probate attorney. Haimo Law would be glad to represent the personal representative and ensure that the estate is administered properly and creditors receive the minimum possible distributions. The next post will explain the latter.
Author:
Barry E. Haimo, Esq.
Haimo Law
Strategic Planning With Purpose
Email: barry@haimolaw.com
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