When a person dies, the probate process acts as a method of legally putting to rest their affairs. As a probate lawyer can explain, one of the most important parts of the process is the ability of an individual or entity to file a probate claim. These claims allow creditors to attempt to collect any debts that the person who died may have had. Each state has its own probate laws, however, they all establish stringent rules on how these claims are determined to be legit and who gets paid first.
The Claims Process
The claims process begins shortly after a person’s death. Most states have a minimum amount of assets – generally, more than $100,000 – that requires an estate to go through the probate process. This involves filing a will with the probate court (if the decedent had one) and having an executor appointed by the court. The executor will manage the administration of the will and is an important figure for creditors who want to file claims.
As part of their duties, the executor is required to publish a notice of probate in an appropriate newspaper to alert any potential creditors to the process. They must also send written notice to any creditors that the executor “knows or may reasonably ascertain.” Once a creditor receives notice of probate, they have a certain timeframe within which to file a claim for payment from the estate. Any claims after the period has expired will be barred by the court as long as the executor provided proper notice.
Once a creditor files a claim, the executor has three options, they may choose to pay it in full, they may attempt to settle, or they may refuse to pay. In the case of an executor who refuses to pay a claim, the creditor then has the option of litigating the claim in front of a judge to determine its validity.
Establishing Priority
Once the executor and the courts determine which claims are valid, state law will determine in what order the debts of the estate will be paid. This again is determined by whatever the specific law in that state is, however, the typical order is:
- Reasonable funeral and burial expenses
- Surviving spouse or child award. This is an award of enough money to the decedent’s spouse and children to keep them living their usual lifestyle for a certain period of time (usually 9 to 12 months) following the person’s death.
- Debts due to the United States government
- Debts owed to employees, not to exceed a certain amount, and debts dealing with the decedent’s last illness
- Money and property held in trust by the decedent
- Debts due to state and local government
- All other claims
Contact an Estate Planning Law Firm Today
Planning for what will happen to your property and assets is important for you and your loved ones. If you would like more information on estate planning and the probate process, make sure you speak with a lawyer who is skilled and knowledgeable in estate law. Call an experienced attorney, like a probate lawyer from a law firm like W. B. Moore Law LLC.