You might be able to collect the debt from an individual that has passed away by filing a claim against the decedent’s estate.
When a deceased individual owes you money, you going to need to file a claim toward their estate to collect what is owed to you. The process is straightforward, but the details vary from one region to another. You might need to investigate or get assistance from a lawyer to be sure you adhere to the appropriate procedures and file your claim in a timely manner.
The process of probate
Probate is a methodical way of taking inventory of a deceased individual’s assets, paying-out creditors, and allocating the leftover assets to the beneficiaries of a will or to legal heirs when there is no will. The probate process is overseen by the probate court in the region where the deceased lived.
Many assets are not going to go through the probate process. For instance, retirement accounts can transfer directly to beneficiaries, as can living trusts, and living trusts can bypass probate entirely. However, probate is the only way to legally transfer ownership of certain assets to heirs and beneficiaries.
Probate begins by filing a request in probate court to name an executor with a will, or an administrator without will. This individual, also referred to as a personal representative, is responsible for taking a catalog of the assets in the probate estate, informing beneficiaries and creditors, and paying-out the deceased taxes, their debts, and the costs for a funeral. The last step is for inheritances to be allocated to beneficiaries and heirs.
The entire probate process usually takes from 8 to 12 months. Typically, a small estate is probated more quickly than a more complicated one.
How to file a claim towards an estate
A claim towards an estate is a written petition for the estate to pay-out money that the deceased owed. Since probate laws differ by state, different states have slightly various methods for informing creditors and filing a claim towards an estate.
In a lot of cases, the personal representative places an article in a newspaper notice declaring the estate is getting probated. The representative might also place an article notice to alert creditors that might want to make a claim towards the estate. In many states, representatives may also mail a notice to the creditors they are aware of.
It’s a good idea not to rely on these notices to make you aware that you should file a claim. These notices are covered in fine print, and you possibly might not ever get a notice by mail.
If you have knowledge that an individual that owes you money has expired, get a hold of the probate court in the county where the deceased lived to find out if an estate is being probated.
Should a case has be opened, the court can give you the number of the case and let you know if the court has a document for making a claim towards an estate.
Filing a claim towards an estate is a somewhat simple process:
- In your claim, you are going to state under oath that the debt is owed and give details on the debt’s amount and any payments that the deceased has made.
- When you have written documentation, you can put it along with to your claim document.
- You are going file your claim through the probate court, and you might also be required to send a copy to the personal representative.
Each state has regulations concerning how much time you have to file a claim towards an estate. Should you file a claim after the time limit, it could be declined. If you’re not sure how to make a claim or the time limit concerns, speak with a lawyer. A lawyer can also explain your choices should your claim being declined.
When the estate has sufficient assets, your claim should be paid-out prior to funds being distributed to heirs. When there are not sufficient funds to pay-out all creditors, claims are going to be paid-out in order of precedence. Claims towards the probated estate can usually only be paid-out with assets depending on probate, not with assets that transfer outside of probate.
What happens when you file a claim against a probated estate? LegalZoom. (n.d.). Retrieved February 22, 2023, from https://www.legalzoom.com/articles/what-happens-when-you-file-a-claim-against-a-probated-estate
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