One of the most important obligations an executor has to an estate is the repayment of debts. In fact, if you make mistakes with how you handle property in an estate, those owed money by the deceased can hold you responsible as the executor in some circumstances.
Estate administration typically involves several steps that help protect executors from these risks. You have to notify the courts of the impending estate administration. You also typically have to reach out to known creditors and let them know in writing about the death. Finally, you may have to publish a notification in the local newspaper about the death. How long do creditors have to make a claim against the estate?
Creditors can have up to two years to make a claim
Creditors could ask for repayment for up to two years after someone’s death, but you can take steps to shorten how long they can bring a claim. Once you initiate probate proceedings, notify creditors and publish the estate announcement, which you should publish once a week for at least two consecutive weeks, creditors then have to assert their rights to the courts.
You will likely pay off accounts that you know about and contact known creditors directly. Creditors receiving direct notification typically have 30 days to make a claim. Those who discover information about the death of a debtor through newspaper notification have up to 90 days to file a claim with the probate court.
Executors can protect themselves by waiting at least 90 days after they finish the notification and publication process for creditors before they begin distributing property to beneficiaries and heirs. Longer delays could affect creditor claims as well, leading some people to wait two years or longer before they liquidate or distribute property after someone’s death.
Making sure that you comply with the law and with the terms of the estate plan are both important steps for protecting yourself during estate administration.