Numerous parties may have an interest in an estate after an individual dies. Their immediate family members may be heirs who inherit if there are no estate planning documents. Selected beneficiaries may also inherit from estates when decedents had the foresight to draft documents before their passing.
The personal representative of the estate may have to communicate with mortgage and utility companies. They may have to file a tax return to inform the Internal Revenue Service (IRS) of an individual’s passing. They usually also have to notify known creditors about upcoming probate proceedings.
What does creditor notice entail?
There are two separate ways that a personal representative notifies creditors about pending probate proceedings. Typically, personal representatives must publish notice about upcoming probate proceedings in the local newspaper. The notice needs to run a minimum of three times.
Personal representatives also have to review financial records and incoming mail to identify known and likely creditors. They must then send direct written notice to individual creditors advising them of the need to make a claim in probate court.
If the estate does not have enough assets to repay all valid claims, extra care is necessary. Personal representatives must pay claims in the proper order of priority. Following the right procedures is critical for the protection of the personal representative. If they fail to notify creditors and do not repay them as a result, they could face personal financial liability.
Securing legal support throughout estate administration and probate proceedings can significantly reduce the likelihood of costly mistakes. Personal representatives who understand their responsibilities can appropriately notify creditors and pay valid claims using estate resources.
