Ensuring that the money you have loaned to others is repaid to you is difficult enough when your debtors are alive – but what about when they are dead? Don’t despair – the rules of probate law are on your side. As long as you are proactive and take the initiate in recovering what is owed to you, and have an experienced probate lawyer advising you, there is a good chance that your claim as a creditor will be satisfied. You’ll get your money back, and who knows – you may even be helping the dearly departed to rest a little easier!
Stand up and be counted – as a creditor
The first thing you need to understand is that the debt owed to you still exists, and is still valid, even though the individual who incurred it is now deceased. This is because the debt lies against the deceased’s estate, which continues to exist beyond the deceased’s death. Probate law governs the administering of deceased estates, including the settling of debts, the distributing of assets, and the resolving of any legal disputes arising from claims to the deceased’s estate. As soon as you become aware that a debtor of yours has passed away, contact the family or the representatives of the deceased debtor’s estate and make the debt known. Continue to send monthly bills and payment reminders, and obtain a forwarding address if possible. You want to make sure that you are a ‘known’ creditor as opposed to an ‘unknown’ creditor, as your claim is far more likely to be responded to if you make it clear that you are owed money by the deceased estate.
Prepare a debt claim
After having made contact with the debtor’s family, the best possible outcome would be that the debt is repaid to you in a timely manner. Unfortunately, it doesn’t always work out this way. Often, families will try to protect the assets which the deceased has left to them, and may not be forthcoming when it comes to debt settlement. If your requests for repayment are being ignored, it may be time to start investigating whether the deceased’s estate is undergoing probate proceedings in the probate court. The probate courts’ case records are publicly accessible, and in some counties, are available online. Personal representatives of the estate are also obliged to publish a notice to creditors in the county newspaper of the deceased’s place of residence that probate proceedings will be commencing. Once you’ve determined that probate proceedings for the deceased estate are underway in the probate court, you can prepare a debt claim and deliver that to the personal representatives of the estate file or deliver the debt claim to the Clerk of the probate court itself.
Time is of the essence in probate law
Creditors have 90 days to respond to the publication in the county newspaper and file a claim. However, if the personal representative is made aware of your claim before the expiration of the four month period, they are required to forward to you personally the notice published in the newspaper. Once you have filed your claim, the representatives have time to challenge it for invalidity – if they do not do this, your claim will be deemed valid. If you claim is challenged, you will have to respond and request that a probate court determine the validity of your claim. Similar rules apply to the trustees of the deceased’s living revocable trust, should you wish to claim from a trust and not a probate estate. There is also a statute of limitations of two (2) years after which no claims may be brought against the decedent.
Consult a probate law attorney
Claiming debts owed from a deceased estate can often be a complex and challenging task, especially if the family or estate representatives are hostile to your claim. Consulting a probate lawyer who is familiar with the rules of probate law and debt collection from deceased estates will give you the best possible chance at recovering what you are owed. The sooner you obtain legal advice, the sooner you can act – and the sooner you can reclaim what you are owed.