Typically, if an estate owes you money, you are considered an estate creditor. There are different types of estate creditors. When and how an estate creditor is paid depends on which category they fit into. For example, many claims that are not secured by real estate or vehicles are considered to be “general unsecured claims”. These claims are paid after all other creditors are paid, but before the family is paid.
Each estate must run an ad in the legal newspaper for the county where the estate is pending with details on where to submit claims. First, to get in line to be paid, you must submit a claim to the personal representative of the estate.
Once the estate creditor submits a claim, the personal representative or their attorney will review it to determine whether it appears to be a valid debt of the estate. If the personal representative believes the claim is valid, then it will be paid at the appropriate time.
If, however, the personal representative does not believe a claim is valid, then the personal representative may request additional information to validate the claim. Or, the personal representative may simply send a notice to the estate creditor stating that the claim will not be paid because the personal representative does not believe it is valid.
If the personal representative denies the claim, that is not the end of the road for the estate creditor, however. Although the personal representative can (in some cases) have a wide range of power to determine the validity of claims, the court retains final authority to decide whether a claim can or cannot be paid.
To bring the matter before the court, the estate creditor must file a formal claim with the court and petition the court to rule on the validity of the claim. Depending on the type of claim, this process may need to take place in Probate Court or in Superior Court.
Once the process is started, both the executor and the estate creditor will be able to seek information and documents from one another through a process called discovery. The purpose of the discovery period is to allow both sides to develop all evidence necessary to present their case to the court.
After the discovery period ends, the court will schedule a hearing on the matter. At that hearing, the court will hear all evidence that the estate creditor and the executor or administrator desire to bring forward. After that, the court will rule on the claim, and the court’s ruling is binding on all parties.
That means that if the court rules that the claim is valid, then the personal representative must pay it. On the other hand, if the court rules that the claim is not valid, then the personal representative will be prohibited from paying it (even if the personal representative later decides that he or she wants to pay it).
These types of petitions and hearings are very complicated and easy to mess up. Because of that, our office recommends that anyone contemplating this type of situation speak with an experienced probate litigation attorney. If you would like help with this type of situation, click here to request a consultation with a member of our team.
Disclaimer: The information above is provided for general information only and should not be considered legal advice. Our probate lawyers provide legal advice to our clients after talking about the specific circumstances of the client’s situation. Our law firm cannot give you legal advice unless we understand your situation by talking with you. Please contact our law office to receive specific information about your situation.