Dan D. owned several businesses, including some with high potential liability. For example, his roller skating rink had been sued several times. His boat tours of the coast were enjoyable, but there was always the possibility of property damage, injury or even death. Some of his other business concerns carried fairly high levels of debt. In fact, any time someone owns property or a business, there is the potential for creditor claims or civil judgments. But how are these claims handled when probating the estate of the owner? And are there ways to head off potential claims before the owner passes away?
The estate’s personal representative gathers estate assets and claims against the estate.
In most probate cases, the personal representative publishes a notice to creditors in a newspaper published in the county where the estate is being administered. The notice is published once a week for two weeks. It contains information about the estate so that creditors know who to contact about their claim. Creditors also are given a time limit within which to file their claims against the estate. The personal representative may also serve copies of the notice to creditors on any parties that may seem to have a claim against the estate.
Any creditor that fails to file a timely claim against the estate is barred from recovering funds from the estate.
Include creditors and potential creditor claims when discussing your estate plans with an attorney. There may be ways to limit the number of claims against your estate.
The time to protect your estate from creditor claims is before probate begins.