Creditor Claims Following Death
While not mandatory, we would not fulfill our duty to provide you sound legal advice without telling you this:Lyons Sullivan strongly recommends that Personal Representatives arrange for publication of notice to creditors immediately after being appointed, in order to start a four month clock running for submission of unascertainable claims. Absent publication, creditors may bring claims within the first two years following death unless barred by an otherwise applicable statute of limitations. In the case of creditors ascertainable by the Personal Representative with reasonable review of the decedent’s books and records, the notice must be mailed to be effective, and if there is less than thirty days until the four month period expires such ascertainable creditors have a full 30 days to present their claims. We usually advise Personal Representatives to carefully distinguish between amounts owed by the decedent while alive and expenses incurred by the estate post-mortem. The former should generally not be paid outside the creditor claims procedure and can be made to wait until there is sufficient liquidity. The latter can and should be paid as expenses of administration on a regular basis. There is a statutory priority system generally applicable to probate estates although federal income tax liabilities are given a somewhat higher priority by federal law. One of the critical facts to determine up front is whether the estate is solvent. If it is not or is likely to become insolvent in the course of administration, the Personal Representative must determine what nonprobate assets may be reached to satisfy creditor claims. Under Washington law, both probate assets and nonprobate assets that were subject to satisfaction of the decedent’s general liabilities immediately before death are liable for payment of claims by the decedent’s creditors. Contact a probate lawyer today for more assistance.