Creditors Claims During Probate

Creditors who are owed money by a deceased individual can make claims in the probate process to seek payment from the deceased person’s estate. The probate process is the legal procedure for settling a deceased person’s estate, paying off debts, and distributing remaining assets to heirs or beneficiaries. As a probate lawyer in Folsom, one of my primary goals is to ensure that my clients experience a smooth probate whereby creditors are paid and the family of the deceased does not have any further trouble. 

Here are the general steps for creditors to make a claim in probate:

1. Identify the Deceased’s Assets: Creditors should first identify the assets of the deceased person’s estate. This includes real estate, personal property, bank accounts, investments, and any other assets that may be used to pay off debts.
2. Check the Deadline: Creditors must be aware of the deadline for filing claims in probate. In California, there are specific timeframes within which creditors must submit their claims. For example, during probate, notice is required to be published in a newspaper of general circulation to notify potential creditors that the deceased has passed. Creditors normally have four months from this notice to file claims. 
3. Gather Documentation: Creditors should gather all relevant documentation to support their claims. This may include invoices, contracts, bills, promissory notes, or any other evidence of the debt owed by the deceased.
4. Complete a Claim Form: Most probate courts provide claim forms that creditors can use to submit their claims. The form typically requires the creditor to provide details about the debt, the amount owed, the date the debt was incurred, and any supporting documentation.
5. File the Claim: The creditor must file the completed claim form with the probate court overseeing the estate. It is essential to file the claim within the specified deadline.
6. Notify the Personal Representative: The creditor should notify the personal representative (executor or administrator) of the estate and their probate lawyer about the filed claim. This is typically done by sending a copy of the claim to the personal representative’s and probate lawyer’s addresses.
7. Review by the Personal Representative and Lawyer: The personal representative and lawyer review the claims submitted by creditors and may accept or reject them based on their validity and the available assets in the estate. If the personal representative rejects a claim, they must provide a written explanation for the rejection.
8. Court Review: If a dispute arises between the creditor and the personal representative regarding the validity of a claim, the court may need to review and resolve the matter. Creditors and the estate’s representative may have an opportunity to present their cases to the court.
9. Payment from Estate Assets: Valid and accepted creditor claims are paid from the assets of the deceased person’s estate. The estate’s assets are used to satisfy outstanding debts in the order of priority established by California law.
10. Remaining Assets Distribution: After creditors are paid, any remaining assets are distributed to the heirs or beneficiaries according to the terms of the deceased person’s will or the state’s intestate succession laws.

Conclusion

It’s important for both creditors and personal representatives to adhere to the probate process and deadlines established by California law. Both creditors and personal representatives should consider consulting with a Folsom attorney who specializes in probate and estate matters to ensure that the claim is properly handled and that their respective rights are protected throughout the process. If you have any questions about creditor claims during probate, contact Thapar Law at 916-579-0605 or send us a message.