If a deceased person owes you money, you'll need to file a claim against their estate to collect what you're owed. The process is simple, but the specifics vary from one locality to another. You may need to do some research or get help from a lawyer to make sure you follow the proper procedures and file your claim on time.
The probate process
Probate is an orderly way of taking stock of a deceased person's assets, paying creditors, and distributing the remaining assets to the beneficiaries of a will or to legal heirs if there is no will. The probate process is supervised by the probate court in the locality where the decedent lived.
Some assets don't go through the probate process. For example, retirement accounts can pass directly to beneficiaries, and living trusts can beneficiaries, and living trusts can avoid probate altogether. But probate is the only way to transfer ownership of certain assets to heirs and beneficiaries legally.
Probate begins with filing a petition in probate court to appoint an executor if there is a will, or an administrator if no will exists. This person, also known as a personal representative, is responsible for taking an inventory of the assets in the probate estate, notifying creditors and beneficiaries, and paying the decedent's debts, taxes, and funeral expenses. The final step is for inheritances to be distributed to heirs and beneficiaries.
The entire probate process typically takes eight to 12 months. Usually, a simple estate is probated more quickly than a more complex one.
How to file a claim against an estate
A claim against an estate is a written request for the estate to pay money that the decedent owed. Because probate laws vary from one state to another, different states have somewhat different procedures for notifying creditors and filing a claim against an estate.
In most cases, the personal representative publishes a newspaper notice saying the estate is being probated. The representative may also publish a notice to alert creditors who may want to make a claim against the estate. In some states, representatives may also mail a notice to the creditors they know about.
It's best not to count on these notices to alert you that you need to file a claim. Newspaper notices are buried in fine print, and you may never receive a notice by mail.
If you know that a person who owes you money has passed away, contact the probate court in the county where the decedent lived to learn whether an estate is being probated.
If a case has been opened, the court can give you the case number and tell you whether the court has a form for making a claim against an estate.
Filing a claim against an estate is a fairly simple process:
1. In the claim, you'll state under oath that the debt is owed and provide details on the amount of the debt and any payments the decedent made.
2. If you have written documentation, you can attach it to your claim.
3. You'll file the claim with the probate court, and you may also need to send a copy to the personal representative.
Every state has rules about how long you have to make a claim against an estate. If you make a claim outside the time limit, it may be rejected. If you're unsure how to make a claim or the time limits involved, consult with a lawyer. A lawyer can also explain your options if your claim is denied.
If the estate has enough assets, your claim should be paid before money is distributed to heirs. Where there isn't enough money to pay all creditors, claims will be paid in order of priority. Claims against the probated estate can typically only be paid with assets subject to probate, not with assets that pass outside of probate.
If the estate has enough assets, your claim should be paid before money is distributed to heirs. If there isn't enough money to pay all creditors, claims will be paid in order of priority. Claims against the probated estate can typically only be paid with assets subject to probate, not with assets that pass outside of probate.